Evolve launches U.S. marijuana ETF

By The IJ Staff | April 17 2019 01:30PM

Photo: Unsplash

Evolve Funds Group has launched the Evolve U.S. Marijuana ETF (USMJ), which the company says is “the world's first ETF focused on the U.S. marijuana industry.” Units of the ETF began trading April 17 on the NEO Exchange.

"The cannabis opportunity in the U.S. is similar to that of Canada a couple of years ago, but in many respects has the potential to be exponentially larger," said Raj Lala, President and CEO at Evolve. "In the U.S., 10 states have legalized recreational use and 33 states have legalized medical use. Given the population in the U.S. compared to Canada, there are some U.S. cannabis companies generating more revenue than Canadian producers, albeit with much smaller market caps."

Rapid expansion of the market anticipated

"We believe there are significant near-term catalysts that will cause the U.S. market to expand rapidly," added Elliot Johnson, Chief Investment Officer at Evolve ETFs and Portfolio Manager for SEED and USMJ. "There are several laws currently making their way through Congress that would expand legalization of recreational cannabis and give those companies better access to banking and capital. The U.S. will be positioned to become the largest cannabis market globally."

USMJ will be denominated in Canadian dollars. The ETF will incorporate a dynamic foreign-exchange strategy to hedge back to the Canadian dollar, at the discretion of Evolve.

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