German investors will soon have the opportunity to invest in a new ETF focused on the fast-growing legal cannabis industry. In addition, World High Life Plc (NEX:LIFE), a UK-based investment company, is planning to enter the lucrative German cannabis market this year.
The Canadian fund group Purpose Investments will launch the Medical Cannabis and Wellness ETF on January 13, and will offer the product on stock exchanges in Germany, the United Kingdom, Italy, and Ireland. According to the Financial Times, Purpose is working with the ETF issuer HANetf on the European launch.
The new fund will invest in listed companies active in the medical cannabis, hemp, and cannabidiol or CBD market.
Booming industry despite poor share prices
Triggered by the legalization of cannabis in parts of North America, production and distribution of cannabis products is booming. However, the share prices of the companies involved in this industry have tended to fall in recent months. A high level of volatility is characteristic for the cannabis industry.
Although last year was not a successful one for the cannabis sector, marijuana ETFs were in high demand, especially in North America. The largest marijuana ETF, ETFMG Alternative Harvest ETF has now reached a fund volume of $673 million. Last year, however, it lost 28.5%. The second largest cannabis ETF did not fare any better either: the Canadian Horizons Medical Marijuana Life Sciences ETF lost 33.8 % last year.
HANetf and Purpose are confident
“Medical cannabis is an emerging industry with great growth potential and great investor interest,” Hector McNeil, co-founder and co-director of HANetf, told the Financial Times. “So far, European investors have had limited access to the cannabis market.”
“The cannabis sector is still in the infancy of several years of growth and there is ample opportunity for innovation and new discoveries,” Som Seif, Managing Director of Purpose, added.
Is the growth phase still to come?
Many industry observers see the hype surrounding cannabis as still in its infancy. If other countries will follow the example of North American markets, a worldwide market opening for cannabis-based products could still be in the offing. This would trigger a wave that could create a gigantic market. Investors who bet on ETFs comprising cannabis companies could be at an advantage.
World High Life Plc is also planning to enter the promising German cannabis market this year
A significant change in the European cannabis market is already visible, as a result of the general attitude towards medical cannabis and CBD-based products. World High Life Plc (NEX:LIFE) is an investment company with a stated goal of becoming the main player in the medical cannabis and CBD sectors.
WHL’s strategy is to create a portfolio of the most promising companies in the UK and other European countries operating in the emerging CBD and medical cannabis sectors. To this end, the company has acquired UK’s leading CBD company, Love Hemp Ltd. Through this partnership, World High Life plans to expand its foothold in Europe, the new frontier market, starting with Germany this year.
Love Hemp Ltd is a producer of a variety of CBD-based products, including sprays, vapes, edibles and cosmetics. The company’s high-quality products are showcased on the shelves of 1,200 high-street stores in the UK.
Germany has become a leading country in the European cannabis industry, since CBD was legalized back in 2017. The country is set to become the most important cannabis market in the near future, and experienced cannabis companies like World High Life will place themselves at the forefront through an early entry.