Medical Marijuana ETF Having a Great Week

April 7, 2017

Jake Ellman

On Wednesday, the Horizons Medical Marijuana Life Sciences ETF (TSX:HMMJ) began trading on the TSX. HMMJ is the first ever ETF offing investors direct exposure to a basket of cannabis related companies in Canada and the United States. The Horizons Medical Marijuana Life Sciences ETF seeks to track the Solactive North American Medical Marijuana Index, giving investors in HMMJ exposure to 16 of the top cannabis companies in North America.

Measurable Gains

So far the new ETF is off to a successful start, trading around $10.78 CAD per share compared to $10.11 CAD when it began trading on April 5th. This represents an over 6% gain in share prices for HMMJ in only a few days of trading, and those who got in are happy to say the least.

Uncorrelated Industry

With broad market indices in the U.S. down in trading so far today, shares of HMMJ are up another 2.57% in early morning trading. This further shows the lack of correlation between the broader market and the publicly traded cannabis companies, making marijuana stocks a worthwhile consideration for portfolio diversification.

Premium to NAV

The index marked a value of 949.89 on the close April 5th, followed by a mark of 971.62 the following day. This represents an increase of just over 2.25% compare to HMMJ's gains of over 2.5% over the same period. This means that shares of the ETF may be trading at a slight premium to NAV, creating opportunity for the authorized participants.

Active Trading

So far in the first few days of trading for this revolutionary ETF, HMMJ has reached an all-time high of $10.79 CAD per share and an all-time low of $10.10 CAD per share. 3,207,141 shares of HMMJ have changed hands so far, with shares outstanding of just over 1,000,000.

What to Expect

We expect continued demand for this ETF, and would expect brokers and intermediaries to begin the creation process to fulfill demand. This will create buying pressure in all 16 of the underlying cannabis companies: