Investors rush to bring weed to the masses

TODAY EUROPE’S first cannabis exchange-traded fund (ETF), the Medical Cannabis and Wellness ETF, dubbed CBSX, launches in Germany. A joint project of Purpose Investments, a Canadian asset manager, and HANetf, a British ETF platform, the fund will invest in listed businesses that grow, make and distribute medical cannabis products. One of the goals of the new venture is to democratise cannabis investments, which have historically been inaccessible (because companies are still private) or expensive (because investors must buy stocks individually). The rise of ETFs—pooled portfolios designed to replicate the performance of an asset class—has made investing in weed cheap and easy. CBSX will be available to investors in Britain, Italy and Ireland.

Marijuana ETFs have proved popular in America. In 2019 investors poured $729m into US-listed funds (and have added another $20m since the start of 2020). According to Jefferies, a stockbroking firm, the legal cannabis market was worth $11bn globally in 2018, and will grow to at least $50bn by 2029. The enthusiasm is in part a consequence of a global trend towards legalisation: medical cannabis products are now legal in more than 40 countries; a handful of countries have also legalised recreational use of the drug. In Britain, where medicinal cannabis is legal but hard to get, such treatments are gaining wider acceptance. In November two cannabis-based medicines were approved for use by the National Health Service (NHS) in England. In June the Church of England dropped medicinal marijuana from its list of excluded investments.