NYSE gets its first weed ETF fund
WEED
A subsidiary of the New York Stock Exchange (NYSE) launches trading on Dec. 26 for its first-ever marijuana fund, the Alternative Agroscience ETF?, marking a major milestone for the burgeoning industry still struggling to obtain access to federally chartered U.S. financial institutions.
As medical and recreational marijuana sales skyrocket in the U.S., the growth is still only in its beginning phases. Twenty-nine states and Washington D.C. have legalized medical marijuana, while eight states and D.C. have legalized recreational sales. (See also: 10 Canadian Marijuana Stocks for Your Portfolio.)
A recent report by Arcview Market Research indicates that the “green rush” should bring in $20.6 billion in revenue by 2020, up from $5.4 billion in 2015. Given the incentive states have to pass marijuana legislation after seeing Colorado rake in $100 million in revenue in its first year and $163 million in its second, a $20 billion-plus estimate could be conservative.
The first-ever U.S.-traded marijuana fund will track the Alternative Agroscience index, an index of companies primarily engaged in the legal cultivation, production and distribution of cannabis, pharmaceutical companies that manufacture or market cannabinoid-related drugs and businesses that make fertilizers and pesticides used in the cultivation of cannabis.
U.S. marijuana companies face difficulty managing their amassed wealth since the federal illegality of weed keeps federally insured banks from doing business with them. Investors, on the other hand, have shown their willingness to get in on the industry’s boom. The Horizon ETF, the first ever marijuana ETF, which launched in Canada in April, has landed $216 million in assets and skyrocketed 44% since its launch.
