Next week, on January 13, the first cannabis ETF will launch in Germany on the Deutsche Börse in Frankfurt. Created by Canadian asset manager Purpose Investments and HANetf, the Medical Cannabis and Wellness Ucits ETF (CBSX) is well-timed at least, to take advantage of the developing shape of the market for the next several years. CBSX is domiciled in Ireland with passported sales to the UK and Italy.
This is, obviously huge news and from a number of fronts beyond being a first mover in what is likely to be an interesting basket if not a portfolio of opportunities scattered all over the continent.
The second reason this is significant of course is that this marks the first time the Deutsche Börse in Frankfurt has actually seemed to embrace the idea of cannabis stock trading at all. This has been hotly fought battleground since 2018 when the exchange briefly delisted all North American cannabis stocks before putting the entire sector on probation ever since.
However, that was so two years ago. These days, with cannabis reform afoot in every European country right now and of even the first inklings of the recreational kind, the world is clearly changing.
Further, that such an announcement comes after a fall of almost continual scandals from the Canadian side of the world, and a regulating industry on this one, cannot be overlooked. The industry from this side of the ocean is in the thick of accepting and meeting the challenge of a regulatory landscape that is not only higher than in North America but also changing thanks to harmonization of global standards.
ETFs, or exchange-traded funds, hold huge potential for investors looking to invest in the vertical but afraid of the cross-class volatility of the industry in general. Sure, cultivation in warmer, cheaper labor climes is afoot, but not all cultivators understand the distribution game. And of course, distribution is currently seen as a “hot ticket” but there have been several flameouts already.
That said, of course, for all the bumps and bruises of an exploding if not establishing industry, and inevitably more to come, the way appears to be smoothing for a regulated financial trade market in the heart of Europe.
And that is a very cheerful way to welcome in a new decade of reform.
Be sure to book tickets to Europe’s hottest cannabis conference, the International Cannabis Business Conference, held in Berlin, Barcelona, and Bern this year!