Rize ETF: Europe’s most diversified cannabis equity portfolio

Rize ETF: Europe’s most diversified cannabis equity portfolio
© iStock/Yarygin

Four new companies have been added to Rize ETF’s specialist thematic Exchange Traded Fund (ETF) to create Europe’s most diversified cannabis equity portfolio.

Rize ETF, Europe’s first specialist thematic ETF issuer, has rebalanced its Global Medical Cannabis ETF – FLWR – which is listed on the London Stock Exchange and remains Europe’s most liquid and diversified medical cannabis equity portfolio.

The Rize Medical Cannabis and Life Sciences Undertakings for the Collective Investment in Transferable Securities (UCITS) ETF has added four new companies to its holdings, taking the total number of companies to 27.

Four companies added to cannabis equity portfolio

The four new companies to enter the ETF will have a combined weight of approximately 5%.

The first company to be added to the cannabis equity portfolio is Ecofibre (Australian Stock Exchange: EOF), an Australian market-leader in hemp technologies and provides innovative solutions that address emerging health and resource sustainability issues. The company’s principal activities are breeding, growing, processing and distributing hemp products. Its ‘Ananda’ retail brands are positioned for the health and wellbeing segment. Hemp is a versatile and US federally-legal product.

Little Green Pharma (Australian Stock Exchange: LGP) was the first Australian company to achieve production of a locally-grown medical cannabis product for patient use. Established in 2016 as a privately-owned company in Perth, Western Australia, it has been supplying Australian patients with naturally-grown medical cannabis products since August 2018. The company operates a vertically integrated medical cannabis business comprising cultivation, production, research and development, manufacturing and distribution of medical cannabis products.

Perrigo (NYSE: PRGO), the world’s largest non-prescription drug company, through its recent partnership with Israel’s leading medical cannabis company, BOL Pharma, has created the world’s first government-sponsored medical cannabis incubator in Israel.

The company is now investing millions of shekels in a plan that calls for six companies with breakthrough technology in the medical cannabis field to be admitted into the incubator annually. The incubator is an audacious move by Israel’s Ministry of Health and its Medical Cannabis Unit to give the country’s medical cannabis industry a big boost and global competitive advantage.

Medical cannabis has a very long history in Israel. For example, tetrahydrocannabinol or THC, the psychoactive compound in cannabis, was first isolated in 1964 by Israeli scientists Raphael Mechoulam of the Hebrew University in Jerusalem’s Centre for Research on Pain, and Yechiel Gaoni of the Weizmann Institute.

Finally, GrowGeneration (Nasdaq: GRWG), has been added to the cannabis equity portfolio. GrowGeneration is the largest hydroponics player in North America. The company is a leading marketer and distributor of nutrients, growing media, advanced indoor and greenhouse lighting, ventilation systems and accessories for hydroponic gardening.

It owns a chain of 25 stores/service centres, including an online e-commerce store, and operates in 10 different states throughout the US and Canada. The company up-listed from the over-the-counter (OTC) market to the Nasdaq Stock Exchange in November 2019, which made it eligible for inclusion into Rize’s ETF.

Medical cannabis ETF’s in Europe

FLWR is currently the cheapest Medical Cannabis ETF available in the European market, and, unlike its European competitors, provides investors with a holistic and global exposure to the medical cannabis investment opportunity.

Rahul Bhushan, Co-Founder at Rize ETF, said: “FLWR offers European investors the chance to participate in the growth of biotech/pharmaceutical companies across the world, not just in North America, working on the development of new-form drugs derived from the cannabis plant. The market continues to expand rapidly, buoyed by the tailwinds of favourable legislation, social acceptance and medical recognition.”

FLWR is purpose-built by Rize ETF in collaboration with index provider Foxberry and cannabis market intelligence firm New Frontier Data. The ETF also adopts a multi-tiered due diligence process to ensure that companies are excluded from the ETF if they are either non-compliant with state and federal laws in the countries in which they operate and/or directly involved in the production and/or distribution of cannabis and/or cannabis-derived products containing more than hemp-defined levels of tetrahydrocannabinol (THC) for the recreational consumer market.

David Barfoot, Head of UK, Ireland and Channel Islands at Rize ETF, said: “It is our view that an ETF tracking this exciting investment opportunity must remain dynamic and adaptive, and able to capture the companies that are strategically tilting their businesses to take advantage of the revenue-generating possibilities that cannabis offers. We ensure this level of responsiveness by virtue of the market intelligence and stock research offered by our specialist partners at New Frontier Data who power up this ETF.”

Rize ETF reminds readers that an investment in the fund(s) involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. The funds may be registered or otherwise approved for distribution to the public in one or more European jurisdictions.

Investors should continue to consider the terms of investment in any fund (or share class thereof) carefully and seek professional investment advice before taking any decision to invest in such Fund (or share class thereof).

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