Medical cannabis sector is real winner of US Election
26th November 2020, London
With the US election finally
decided, one of the clear winners is the medical cannabis sector. While a
Blue Wave would have been the best result for the sector with a potential full
legalization of cannabis in the US, the industry has benefited from the
election result, benefiting our cannabis ETF. In 5 different States, ballot initiatives to legalize medical
and/or recreational cannabis were passed. Most significantly, New Jersey
legalized adult-use cannabis which is expected to create a domino effect in
neighbouring States and the heavily populated eastern seaboard.
Butt, Portfolio Manager of The Medical Cannabis and Wellness UCITS ETF, our cannabis ETF,
said: “The outlook for cannabis is looking increasingly positive. The outcome of the US elections is now expected
to further increase medical legal jurisdictions in the US for cannabis. There are also developments around the world
that illustrate the growing demand for medical cannabis, and how it is becoming
more mainstream. This is a very exciting
time for the legal medical cannabis industry.”
Our cannabis ETF has global reach, including companies in the US, Canada and the UK, and as momentum in this sector
increases in the US, the stage is set for the rest of the world to follow in
the path of medical cannabis legalization. Share prices have reacted positively
to these developments but there is still tremendous upside, and we believe this
is one of the more exciting growth opportunities across sectors.
developments around the world for the legal medical cannabis industry:
a symbolic milestone for medical cannabis activity in September, with over
100,000 patients applying for reimbursement from their insurers since the start
of the medical cannabis program in early 2017 . Although this
number does not include all medical cannabis prescriptions, it does provide
insight into the growth of the medical cannabis programme in Germany, which has
been fairly stable since its inception. In the second quarter of 2020, total
reimbursements reached 36.7M Euros, setting Germany a run-rate of roughly 150M
Euros in sales, and a 24% increase in year over year sales .
In a sign
of confidence, the UK’s financial regulator (Financial Conduct Authority) has
cleared the listing of medical cannabis companies on the senior London Stock
Exchange (LSE). For now, companies operating in the medical cannabis space
globally will be allowed to list providing they have the appropriate government
licenses and do not fall foul to the UK’s Proceeds of Crime Act 2002 (POCA).
The demand for medical cannabis investment continues to grow in the UK, as
evidenced by this regulation.
of patients in Australia and Israel who have been approved medical cannabis
treatment are on the rise, which rounds out the medical cannabis story to be a
wider one beyond the immediate monetisation of the US alone. Australia
experienced another six thousand patients in September , and
Israel another ten thousand in August . Similar stories continue
to prevail in different jurisdictions across the world, but any federal moves
in the US will be largely influential to many international markets as well.
The value of your investment can go down as well as up. When trading ETFs, your capital is at risk.
Learn more about the Medical Cannabis and Wellness UCITS ETF here.