Big Marijuana Bud on Indoor Plant Under Lights at Cannabis Farm

Toronto-based Redwood Asset Management Inc., a subsidiary of Purpose Investments Inc., has announced its entry into the cannabis investment space by re-naming its Redwood Infrastructure Income Fund — a fund that had never launched — to Marijuana Opportunities Fund.

“Purpose Investments pioneered a structure where all of their funds are available both in a mutual fund format through Fundserv as well as an ETF,” says Peter Shippen, president and CEO of Redwood Asset Management. The ETF will begin trading Feb. 1 on the Aequitas NEO Exchange and he predicts that most firms will be accepting Fundserv orders today.

The fund’s new investment objective will be to provide unitholders with attractive long-term capital appreciation by investing in global issuers with interest in the marijuana or marijuana-related industries.

Responsible investors have burning questions about cannabis

The fund will mainly invest in equity securities but it may also acquire other types of securities of publicly listed companies, including American Depositary Receipts, preferred shares, convertible securities, debt securities, subscription receipts, options and warrants.

“We have seen the development of this marketplace and with a clear path to recreational legality in Canada in July, I think the space has both legal and capital markets legitimacy,” Shippen says. “We really do believe that active management can have a real impact in this space.”

The fund’s risk rating will change to “high” from “low to medium,” which is a result of the change to the investment objective and the fund category, which is now Global Marijuana Equity. Management fees for Class A units are 1.75%, and 0.75% for Class F units and ETF units.