newsinsights

Browse our recent blogs, articles and papers below and sign up here for our regular newsletter. 

Medical Cannabis Monthly Report | September

  • Medical cannabis companies continue to show outsize growth and are now becoming profitable 
  • Medical reform in the US will likely set the stage for broader reform in Europe 
  • We continue to see an increase in the number of institutional investors getting involved in the medical cannabis space

Performance Review:

Momentum from July continued into August, with strong performance for our cannabis ETF and underlying verticals. Investors looking for a growth story outside of large-cap tech are starting to recognise the potential of medical cannabis and its affiliated industries.

Medical cannabis companies continue to show outsize growth and are now becoming profitable to the intrigue of traditional long-only investors who have been awaiting to see the sustainability of this outsize growth. With momentum of medical cannabis decriminalization in the US building, we continue to see an increase in the number of institutional investors getting involved in the space which has helped price multiples increase in the space causing for strong returns.

Medical Cannabis Index Monthly Performance

  August 
The Medical Cannabis and Wellness Equity Index (NTR)  7.32% 

Current performance is no guarantee of future performance. Source: Bloomberg/ HANetf

 

Sub-sector  Average Return (August) 
Ancillary Services  12.3% 
Pharmaceutical Cannabinoids  6.0% 
Medical Cannabis   3.9% 
CBDX Wellness  -17.6% 
CBDX  7.3% 

Past performance is no guarantee of future performance. Source: Bloomberg. Data as of 31/08/2020

Medical Cannabis and Wellness Equity Index (NTR) Performance and CBDX Medical Cannabis ETF

Total Return NAV to Date (up to 31/08/2020)


1M 3M  6M  YTD  12M  Since Inception 
The Medical Cannabis and Wellness UCITS ETF (Acc)  7.27% 13.54%  26.27%  14.37%  14.37% 
 Medical Cannabis and Wellness Equity Index (NTR) 7.32% 13.65% 26.06%  13.98%  -13.48  13.98%

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. 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 31/08/2020

Industry News 

Patients using cannabis for medical use continues to increase globally, outside of the much spoken about Canadian and US markets. Latest data showed that patient counts in Australia are reaching the fastest growth rate recorded. Just in the month of July, Australia added 5500 patients to their program to bring the total close to 30,000 patients. It is estimated the potential market size of Australian medical cannabis could reach 700,000 patients in coming years[1]. Israel also recently announced that cannabis patients have reached 60,000 with most medical cannabis being imported into the country from Portugal and Canada[2]. Momentum for medical cannabis is running red hot beyond the well-documented markets of Canada and the US.

Speaking of the US, cannabis momentum continues to dominate as the US House of Representatives take to vote on the MORE Act in September. The Act, which is sponsored in the Senate by Vice Presidential candidate Kamala Harris, seeks to decriminalise medical cannabis at a federal level and using the tax dollars to re-invest in minority communities which have been adversely impacted by the half century long war on drugs in the country. Although mostly symbolic, the flooring and vote on the Act re-emphasises the commitment of the Democratic party towards cannabis reform as public opinion and political climate changes towards cannabis legalization.

On CBD Wellness, a bi-partisan bill has been submitted in the US House of Representatives by Rep. Kurt Schrader (D-OR) and Rep. Morgan Griffith (R-VA) as well, which will ensure that hemp-derived CBD can be lawfully marketed as a dietary supplement in the US. This could prove to be a big step for CBD to find shelf space across national retail chains and un-cuff CBD producers to market and sell ingested CBD products, the widely preferred method of usage.

Outlook

Going into fall and looking forward to the US elections has been the focus of our cannabis research this year. With multiple initiatives to decriminalise cannabis being tabled by the Democrat Party, we could see quick conversion of plans to reality if the Democrats sweep the Senate in addition to their current control of the House.

Medical reform in the US will likely set the stage for broader reform in Europe too, and create a path for faster acceptance of the industry in key markets of UK and Germany.

Consistent News

In our Cannabis ETF, we continue to highlight portfolio ancillary company GrowGeneration (GRWG) which has caught the attention of a wider investor base with its recently posted second quarter earnings. After the company reported same store sales increases of 49%3 and raised guidance for revenues in 2020 and beyond, the investing public has come to recognise the strength of the company’s business model. The stock has quadrupled in value over the past few months as the company continues to execute its simple but robust model in a highly fragmented industry.

CBDX Medical  Cannabis ETF  -Top 10 Constituents Weight

GrowGeneration Corp

16.66%

Innovative Industrial Properti

13.37%

Corbus Pharmaceuticals Holding

10.95%

Scotts Miracle-Gro Co/The

10.64%

Cara Therapeutics Inc

8.59%

Amyris Inc

7.74%

GW Pharmaceuticals PLC

7.45%

NewAge Inc

7.08%

Charlottes Web Holdings Inc

5.53%

22nd Century Group Inc

3.57%

 

Region Breakdown

Weight

United States

92.55%

Great Briton

7.45%

Canada

0.00%

Source: Bloomberg / HANetf. Data as of 31/08/2020

Medical Cannabis ETF Details

The Medical Cannabis and Wellness UCITS ETF, is a UCITS compliant Medical Cannabis ETF domiciled in Ireland.  

Our Cannabis ETF tracks a rules-based Medical Cannabis and Wellness Equity Index from Solactive, consisting of publicly listed companies conducting legal business activities across nine thematic sub-sectors in the medical cannabis, hemp and CBD industries.  

The fund seeks to provide targeted exposure to the rapidly expanding legal medical cannabis industry that is set for further growth as more countries legalise cannabis for medical use.  

Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance.

Exchange BB Code RIC ISIN Currency Income
London Stock Exchange CBDX LN CBDX.L

IE00BG5J1M21

USD Acc
London Stock Exchange CBDP LN CBDP.L IE00BG5J1M21 GBP Acc
Xetra CBSX GY CBSX.DE DE000A2PPQ08 EUR Acc
SIX CBDX SW CBDX.S IE00BG5J1M21 CHF Acc

 

Click here to download. Medical Cannabis Monthly Report.

Tell us how we can help