Could there be a new marijuana ETF on the way?

Time for sober marijuana debate

Time for sober marijuana debate

In a recent filing with the Securities and Exchange Commission, the New York-based ETF issuer outlined plans for the Global X Marijuana ETF.

Assuming the new ETF comes to market, it will track the Marijuana Index, which is provided by Solactive AG. Solactive provides indexes for several other Global X funds. The Marijuana Index is capitalization-weighted.

The established US-listed cannabis ETFs are the ETFMG Alternative Harvest ETF (NYSEArca: MJ) and the newly minted AdvisorShares Pure Cannabis ETF (NYSEARCA: YOLO).

"In order to be eligible for inclusion in the Underlying Index, a company is considered by the Index Provider to be a Marijuana Company if it derives at least 50% of its revenue, operating income, or assets from the marijuana industry value chain", according to the SEC filing.

An Associated Press analysis has found existing medical marijuana programs take a hit when states legalize cannabis for all adults over age 21.

David Mangone, director of government affairs for Americans for Safe Access, says states see a "massive exodus" of medical patients when they legalize marijuana for all adults - and then, in many cases, the remaining ones struggle.

Privately held Brown Brothers Harriman will act as custodian and transfer agent for the Global X Marijuana ETF.

"We estimate that the total USA cannabis market, if legalized today, could be worth $28 billion, increasing to $41 billion by 2028 on a pre-tax basis", Barclays analysts said in a note to investors", reports CNBC.

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