It wouldn’t be a true 4/20 day without another cannabis exchange traded fund hitting the marketplace. Roundhill Investments has unveiled the Roundhill Cannabis ETF (WEED), which will begin trading on Wednesday.
WEED, as its name suggests, is designed to provide market participants exposure to the cannabis sector. The ETF will invest in different cannabis-related stocks, which include cannabis producers, distributors, cannabis-technology companies and related ancillary businesses.
WEED also utilizes total return swaps to provide exposure to U.S.-focused cannabis companies. The fund also has a 0.75% expense ratio.
The thematic fund comes forward with 24 holdings that are broken out over the United States and Canada. The U.S. represents the bulk of the portfolio exposure at 62.3% and Canadian stocks represent 36.8% of the exchange traded fund.
The new fund is led by Curaleaf Holdings, Inc. (OTCPK:CURLF) weighted at 12.12% and Green Thumb Industries (OTCQX:GTBIF) weighted at 10.10%. Moreover, WEED also has a 4.72% stake in the popular Tilray (NASDAQ:TLRY), making it the ETF’s eighth heaviest position.
Roundhill Investment’s latest launch will undoubtedly find itself fighting for market share in a competitive cannabis marketplace that includes funds like the ETFMG Alternative Harvest ETF (NYSEARCA:MJ), AdvisorShares Pure US Cannabis ETF (MSOS), Global X Cannabis ETF (POTX), Cannabis ETF (THCX), AdvisorShares Pure Cannabis ETF (YOLO), Amplify Seymour Cannabis ETF (CNBS), and the Cambria Cannabis ETF (TOKE).
WEED’s unveiling has come at a time where cannabis ETFs have struggled, as some funds are hovering near all-time trading lows.
Year-to-date price action: MJ -18.9%, MSOS -30.2%, POTX -21.6%, THCX -25.4%, YOLO -29%, and CNBS -23.8%. Placing these returns into perspective, the benchmark SPDR S&P 500 Trust ETF (SPY) is down 6.6% in 2022.
Further supporting the cannabis industry is the news that New Jersey said that 13 medical marijuana stores, including 7 in South Jersey, would be permitted to begin recreational sales.