The company that brought to market the Spirited Funds/ETFMG Whiskey and Spirits ETF (WSKY) has now introduced the first marijuana ETF in the U.S. The ETFMG Alternative Harvest ETF (MJX) tracks the index by the same name, which is comprised of companies likely to benefit from the increasing use of marijuana especially for medical purposes.
The ETF consists of 31 small- and mid-cap companies, with the top 10 accounting for over 40% of total assets, most of them based in Canada, including Cronos Group and CannTrust Holdings. Other smaller holdings include tobacco companies such as Phillip Morris that have either invested in the cannabis market or have indicated an interest in doing so.
MJX started trading Tuesday on the NYSE Arca with $5.7 million in assets and closed Wednesday with almost $6 billion in assets, according to Bloomberg. Its expense ratio is 0.75%.
Sam Masucci, founder and CEO of ETF Managers Group, the company that issued the new fund, told ThinkAdvisor that MJX was launched as a “pure play” that responds to the “tremendous pent-up investment demand to take advantage of the expanding legal cannabis use.”