Medical Cannabis Monthly Report | November

11 November 2021


Cannabis ETF Monthly Report: Key Takeaways


Luxembourg is set to become the first European country to permit adult-use cannabis on a federal level. [1] People aged 18 and over will be able to legally grow cannabis plants for personal use and trade in seeds will also be permitted. Commercial programs could be added at a later date as lawmakers work through production frameworks. The move is the first step of a more fundamental re-regulation of cannabis laws designed to keep users away from the illegal market.

A Swiss parliamentary commission has ruled that cannabis should no longer be banned in Switzerland with the allowance of cultivation, production, trade and consumption of the plant. [2] The commission aims to provide a framework of cannabis legalization to combat the illegal market and protect consumers.

Notable scientist and former advisor to GW Pharmaceuticals, Ethan Russo has completed a first of its kind impact study with regular users of cannabigerol (CBG), a minor cannabinoid found abundant in the cannabis plant. [3] The study noted positive effects of CBG in patients managing anxiety, chronic pain, depression and disturbed sleep. A majority of respondents also claimed superiority of CBG over conventional medicines. Such studies to gather and evaluate data on this new cannabinoid industry will lead to further adoption of cannabinoids in the wellness and therapeutic market.

Project Twenty21 made further progress with regulators adding Attention Deficit Hyperactivity Disorder (ADHD) in adults to the list of indications being covered by the study. [4] The project continues to grow its study with 300 new patients joining in September and a total of 1600 patients serviced to date. The project aims to provide an evidence base which is free from commercial and political influence to develop sensible and effective drugs laws. The NHS on the other hand, which made cannabis available by prescription in November 2018 has only approved three prescriptions in as many years. [5] Regulated groups are still slow in building out medical cannabis systems but there are private groups picking up the slack to develop a strong evidence base.

Frustration rises as UK’s CBD sector awaits clarity from FSA on the future of the country’s cannabidiol market. [6] The FSA so far has declined three-quarters of all Novel Food Applications submitted. The FSA is yet to publish a public list and is still evaluating applications which were submitted before a March 31st deadline this year. The UK CBD sector has been robust in product and supply chain development in anticipation of CBD gaining approval as a food additive.

The Fund CBDX is flat for the month of October with strong performance from the pharmaceutical cannabinoid names as well as the real-estate-oriented exposures. However, ancillary services performed poorly as investors discounted the probability of imminent federal reform in the United States. We continue to see federal reform as the largest catalyst to valuations for the cannabis sector despite the strong underlying fundamentals.


Macro Outlook


From our perspective and when analysing the research our portfolio managers have undertaken, the reform movement has picked up steam in Europe with Luxembourg, Switzerland, and Italy all either implementing or demanding federal cannabis reform. Voters have seen the legalization experiment in Uruguay and Canada and are now able to see the benefits of an adult-use framework. We believe the safety and reliability of cannabis products combined with the destabilization of the illicit market are attractive characteristics which align both politicians and the masses.

On the medical side, our analysis found countries such as Germany and the UK are leading the way for additional indications which can be covered by cannabis and continue to fund the science. Europe is in an early stage of cannabis proliferation and incremental reform is deemed to be a success.

Across the pond the questions continue to linger around federal reform and whether US legislators will be able to pass any of the current initiatives tabled to pass incremental reform in the US. This ranges from specific language snuck into essential bills which would open up the financial sector to operators all the way to comprehensive reform of the justice and medical systems to legalize the cannabis plant and regulate it. Individual states however are able to mute the federal noise and continue on their paths of further proliferation with cannabis flower becoming available to medical patients in New York, the fourth most populous state in the US.

We continue to be bullish on the sector as current valuations discount the probability and speed with which reform is possible in the United States. There is a generational opportunity here to become part of proliferation which will move cannabis from an illicit industry to a regulated and legal one.



Medical Cannabis ETF Performance (As of 31.10.2021)









The Medical Cannabis and Wellness UCITS ETF (Acc)







Medical Cannabis and Wellness Equity Index (NTR)







Performance before inception is based on back tested data. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 31/10/21. Please note that all performance figures are showing net data.


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