NEW YORK, Sept. 19, 2019 /PRNewswire/ -- Global X ETFs, the New York-based provider of exchange-traded funds, announced today the launch of the 15th fund in its Thematic Growth suite, the Global X Cannabis ETF (Nasdaq: POTX). Tracking the Cannabis Index, POTX aims to provide investors with an efficient tool to access leading companies across the cannabis industry.
By tracking an index that specifically targets companies that attribute at least 50% of their revenue, operating income, or assets from the cannabis industry, POTX aims to offer investors a focused approach to investing in an emerging industry that may benefit from further legalization efforts across North America and the rest of the world. Potential holdings include companies that are involved in the legal production, growth, and distribution of cannabis including industrial hemp, as well as companies operating legally in other areas of the cannabis industry, such as those involved in pharmaceutical applications, extracts, and derivative products, cannabidiol (CBD), and additional areas. Eligible holdings may only supply products and/or perform activities related to the cannabis industry in a manner that is legal under applicable national and local laws, including U.S. federal, state, and local laws.
The fund makes additional efforts to prioritize quality and appeal to discerning investors, including utilizing top flight service providers, and incorporating thorough screens of the potential universe of holdings for adherence to applicable regulatory and legal environments. Further, POTX will charge a management fee of 0.50%, making it the lowest cost passive cannabis-focused ETF in the US.i
"The cannabis industry is growing rapidly, with wide-ranging potential applications," said Pedro Palandrani, research analyst at Global X. "With our Thematic Growth ETFs, we are hyper-focused on providing high quality, targeted access to investable emerging trends to accurately capture their future growth potential. Cannabis provides a unique opportunity to access a trend in its nascent stages, driven by advancements in medicinal and industrial uses, but with further upside potential given increasing efforts to legalize recreational use. As regulations evolve, we may see the emergence of enormous regulated markets, and we are thrilled to help a broad range of investors navigate this theme in a rigorous and compliant way."
In 2019 alone, revenue derived from legal cannabis is expected to reach $14.9 billion, a 36% year-over-year growth rate.ii,iii There are indications that this growth could occur even more rapidly as recreational use becomes legalized in additional jurisdictions. Colorado, which legalized recreational retail distribution of cannabis at the state level in 2014, initially saw sales of $14 million per month. By June 2019, it had reached $122 million in monthly sales. As evidenced by various countries and multiple states across the US supporting full recreational cannabis legalization, there could be substantial further growth of this emerging industry, both internationally and within the United States.iv
ABOUT GLOBAL X
Global X was founded in 2008 with the mission of listening to and empowering clients to invest wisely in unexplored and intelligent solutions. Our product lineup features more than 60 ETF strategies. While we are distinguished for our Thematic Growth, Income and International Access ETFs, we also offer Core, Commodity, and Alpha funds to suit a wide range of investment objectives. Global X is a member of Mirae Asset Global Investments Group, a Seoul-based global enterprise which offers asset management expertise worldwide. Explore our ETFs, research and insights, and more at globalxetfs.com.
Investing involves risk, including the possible loss of principal. The investable universe of companies in which POTX may invest may be limited. The Fund invests in securities of companies engaged in Healthcare and Pharmaceutical sectors. These sectors can be affected by government regulations, expiring patents, rapid product obsolescence, and intense industry competition. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. POTX is non-diversified.
POTX’s investments are concentrated in the cannabis industry, and the Fund may be susceptible to loss due to adverse occurrences affecting this industry. The cannabis industry is a very young, fast evolving industry with increased exposure to the risks associated with changes in applicable laws (including increased regulation, other rule changes, and related federal and state enforcement activities), as well as market developments, which may cause businesses to contract or close suddenly and negatively impact the value of securities held by the Fund. Cannabis Companies are subject to various laws and regulations that may differ at the state/local, federal and international level. These laws and regulations may significantly affect a Cannabis Company’s ability to secure financing and traditional banking services, impact the market for cannabis business sales and services, and set limitations on cannabis use, production,
transportation, export and storage. The possession, use and importation of marijuana remains illegal under U.S. federal law. Federal law criminalizing the use of marijuana remains enforceable notwithstanding state laws that legalize its use for medicinal and recreational purposes. This conflict creates volatility and risk for all Cannabis Companies, and any stepped-up enforcement of marijuana laws by the federal government could adversely affect the value of the Fund’s investments. Given the uncertain nature of the regulation of the cannabis industry in the United States, the Fund’s investment in certain entities could, under unique circumstances, raise issues under one or more of those laws, and any investigation or prosecution related to those investments could result in expense and losses to the Fund.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Global X NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the Mid-Point between the Bid and Ask price as of the close of exchange. Closing price returns do not represent the returns you would receive if you traded shares at other times. Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index.
Since the Fund's shares did not trade in the secondary market until several days after the Fund's inception, for the period from inception to the first day of secondary market trading in Shares, the NAV of the Fund is used to calculate market returns.
Carefully consider the Fund's investment objectives, risks, and charges and expenses before investing. This and other information can be found in the Fund's summary or full prospectuses, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting globalxetfs.com.. Please read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments. Global X Funds are not sponsored, endorsed, issued, sold or promoted by Solactive AG, nor does Solactive AG make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO, Global X nor Mirae Asset Global Investments are affiliated with Solactive AG.
i Source: ETF.com, Marijuana ETF Channel, as of August 23, 2019. As compared to the two other passively managed cannabis- focused ETFs listed in the US as of August 23, 2019.
ii BDS Analytics, "New Report: Global Legal Cannabis Markets to Grow 36% in 2019 Despite 2018 Challenges; To Break $40 Billion by 2024," Jun 20, 2019.
iii BofA Merrill Lynch, "A cannabis world…and more people are living in it," Apr 17, 2019.
iv Pew Research, "About six-in-ten Americans support marijuana legalization," Oct 8, 2018.
SOURCE Global X ETFs