There is a clear interest seen in retail shareholders for a cannabis exchange-traded fund. The market is still not so big to justify an ETF, however, CANOPY Growth Corporation(OTCMKTS:TWMJF) appears a reasonable substitute. The company is broadly expanded into many aspects of the non-medical and medical marijuana segment. Hence, it should participate in any advancements in the cannabis market in the foreseeable future.
The highlights
A comparison of Canopy Growth with that of the “Let’s Toke Business Marijuana Composite Index” shows it to be resembling the index. The company has shown a risk profile close to mean based on this index. If investors want to buy one stock for long-term, then TWMJF can be a good option.
An ETF is a listed security that replicates the performance of a commodity, an index, or a group of assets. Usually, the ETF take clues from the underlying asset. For instance, a gold ETF will hold bullion and/or stocks convertible into gold. The holder is eligible to their proportion of the profits, often in a way of dividends or interest on shares owned and the assets residual value in the case of liquidation.
For now, not present, but a Canadian cannabis ETF can be set up to follow a marijuana index, by owning a considerable portfolio of Canadian cannabis firm assets and/or shares. In some events, an ETF might try to build a portfolio that correctly copies the holdings in the index in exactly the same proportion. Once it happens, the stock of the ETF can be listed and stockholders can trade as if they had holdings of stock. The capability of the ETF to trail its target will be noted over time.
Canopy Growth has interests in numerous sections of the Canadian cannabis segment and, as in an ETF, a shareholder owns a balanced share of the assets. For historical data, Tweed, Inc. was in the list of the early licensed manufacturers in Canada. In August 2015, Tweed merged with Bedrocan and established the dominant marijuana firm in Canada. The firm then got a new name, Canopy Growth Corp. later becoming the first cannabis firm anywhere to be listed on a standard major exchange.
