A Guide To Investing In The Hmmj Etf

The Horizons Marijuana Life Sciences Index ETF (HMMJ) is a Canadian exchange-traded fund (ETF) that offers investors exposure to a basket of North American publicly listed companies with significant business activities in the marijuana industry. HMMJ is one of the top marijuana ETFs and is known for its diversified portfolio of pot stocks, which can help investors build long-term wealth. The ETF is designed to replicate the returns of the North American Medical Marijuana Index and includes companies involved in direct production or supply of marijuana, biotechs developing prescription drugs containing cannabinoids, suppliers of equipment, and companies leasing property to growers. While HMMJ provides a way to invest in the marijuana industry without picking individual stocks, it's important to consider the fund's management fees, potential weaknesses in the portfolio, and the overall volatility of the sector.

HMMJ ETF's top holdings

The Horizons Marijuana Life Sciences Index ETF (HMMJ) is a marijuana ETF that trades on the Toronto Stock Exchange. As of October 2020, the top five holdings of HMMJ were Innovative Industrial Properties (IIPR), Canopy Growth, GW Pharmaceuticals, Aphria, and Cronos Group, which together accounted for 63% of the fund.

IIPR is a marijuana-focused real estate investment trust that generates a steady stream of cash flow and has a forward dividend yield of 3.6%. The company has increased its dividend yield by 368% in the last three years and its clients include large medical marijuana players such as Trulieve Cannabis and Cresco Labs.

Other top holdings of HMMJ include Jazz Pharmaceuticals PLC, The Scotts Miracle-Gro Co Class A, Constellation Brands Inc Class A, SNDL Inc Ordinary Shares, and Chart Industries Inc.

HMMJ's performance

The Horizons Marijuana Life Sciences Index ETF (HMMJ) is a marijuana exchange-traded fund (ETF) that trades on the Toronto Stock Exchange. The fund is designed to provide exposure to a basket of North American publicly listed companies with significant business activities in the marijuana industry.

As of October 2, 2020, the top five holdings of HMMJ included Innovative Industrial Properties (IIPR), Canopy Growth, GW Pharmaceuticals, Aphria, and Cronos Group, which together accounted for 63% of the fund. IIPR, a marijuana-focused real estate investment trust, was the largest holding and had gained 75% year to date as of that date.

HMMJ has underperformed in recent years, with the fund down 75% from its record highs as of October 2020. The overall weakness in the cannabis sector has resulted in a prolonged bear market that has weighed on HMMJ's performance.

However, the marijuana industry is still in its early stages and is expected to grow rapidly in the coming years. Canada's licensed producers are well-positioned to benefit from the expected pot legalization laws in the U.S., Latin America, and Europe. This could present an opportunity for investors to buy HMMJ at a discounted price and benefit from the potential growth in the industry.

In summary, while HMMJ's performance has been disappointing in the short term, the fund may have long-term growth potential due to the expected expansion of the marijuana industry. Investors should carefully consider their risk tolerance and the potential impact of regulatory changes on the industry before investing in HMMJ or any other marijuana-focused ETF.

HMMJ's fees

HMMJ Fees

The Horizons Medical Marijuana Life Sciences Index ETF (HMMJ) is the only marijuana-focused exchange-traded fund (ETF) available as of 2017. It is traded on the Toronto Stock Exchange (TSX).

The HMMJ ETF has a management fee of 0.50% (or 0.40% for accounts over $100,000). This is in addition to the 0.75% expense ratio and trading costs.

The ETF invests in stocks in the North American Marijuana Index, which includes companies directly producing or supplying marijuana, biotechs developing prescription drugs containing cannabinoids, suppliers of cultivation equipment, and property leasing companies.

While the HMMJ ETF provides instant diversification in the marijuana sector, investors may also consider picking individual stocks within these categories that offer a better risk-reward profile.

HMMJ's eligibility criteria

The Horizons Marijuana Life Sciences Index ETF (HMMJ) is an exchange-traded fund (ETF) that invests in stocks in the North American Marijuana Index. The ETF seeks to replicate the performance of the North American Marijuana Index, which is designed to provide exposure to a basket of North American publicly listed companies with significant business activities in the marijuana industry.

To be included in the North American Marijuana Index, companies must meet certain eligibility criteria. These criteria include having significant business activities in the marijuana industry and being publicly listed in North America. The companies in the index fall into four main categories:

• Companies that produce or supply marijuana or cannabis directly, such as Aphria (TSE: APH).
• Biotech companies that develop prescription drugs containing cannabinoids found in marijuana, such as GW Pharmaceuticals (GWPH) and Insys Therapeutics (INSY).
• Companies that sell supplies and equipment to cultivate marijuana, such as Scotts Miracle-Gro (SMG).
• Companies that lease property to growers, such as FutureLand.

The HMMJ ETF provides investors with a diversified portfolio of pot stocks, including a mix of traditional licensed producers, ancillary pot companies, and medical marijuana players. As of April 26, 2024, the top 10 holdings of HMMJ were Innovative Industrial Properties Inc, Jazz Pharmaceuticals PLC, Scotts Miracle-Gro Co, Chart Industries Inc, Canopy Growth Corporation, and Constellation Brands Inc Cl A.

HMMJ's weaknesses

• The ETF is not cheap, with an annual management fee of 0.75% on assets, which is nearly three times as much as investors pay for sector ETFs on average.
• The Horizons Marijuana Life Sciences Index ETF is only available over the counter (OTC) in the United States or on Canadian stock exchanges. OTC and international stock trades may be subject to higher commissions at some online discount brokers.
• The ETF has some glaring weak spots in its portfolio. For example, roughly 7.5% of its portfolio is invested in Scotts Miracle-Gro, a company that generated only about 11% of revenue and pre-tax segment profits from its hydroponic business unit, Hawthorne, in 2017.
• The ETF also has about 3.1% of its assets tied up in Supreme Cannabis (formerly known as Supreme Pharmaceuticals), a company with a rather complex capital structure that includes warrants, options, and other convertible securities that could dilute shareholder gains.
• The Horizons Marijuana Life Sciences Index ETF is down 75% from its record highs. The overall weakness in the cannabis sector has resulted in an elongated bear market, which has weighed heavily on HMMJ as well.

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