ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Thematic Investing Channel
  2. Lots Of Potential For The POTX Cannabis ETF
Thematic Investing Channel
Share

Lots Of Potential For The POTX Cannabis ETF

Aaron NeuwirthOct 02, 2019
2019-10-02

The Global X Cannabis ETF (POTX ) is the newest addition to the cannabis ETFs fray and like rival new cannabis ETFs, the fund is dealing with some rough timing because marijuana stocks have been slumping. However, the underlying investment thesis for POTX remains solid, particularly as more favorable steps toward broader legalization are taken in the U.S.

POTX’s underlying index holds “companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses including but not limited to extracts, derivatives or synthetic versions,” according to Global X.

There are some inklings the political environment in the U.S. is growing increasingly favorable toward the cannabis industry and related investments.

“With bipartisan support earlier this week, the U.S. House of Representatives voted 321-103 to pass the SAFE Banking Act, which could enhance access to traditional banking and financial services products for cannabis producers and retailers,” according to Nasdaq.

Planting Some Big Opportunities

The industries that constitute the multi-billion dollar cannabis universe represent a new frontier, where proper caution and due diligence must be exercised surrounding its regulations and risks, in seeking attractive long-term cannabis investment opportunities.

Vital to the long-term thesis for cannabis ETFs, including POTX, is increased liberalization of the U.S. marijuana market and how Canadian companies perform in the U.S. because Canadian cannabis firms represent 80% of POTX’s weight.

There was some good news on that front recently as Utah signed a bill allowing for more medical marijuana dispensaries. Some other states are poised to consider legal marijuana measures next year.

Related: Get Ready, Another Cannabis ETF Lights Up

“Adding to political ebullience is talk that both South Dakota and Wisconsin could put legal marijuana initiatives on 2020 ballots. That news comes on the back of headlines indicating governors from Connecticut, New York and other states in that region will form a group to coordinate marijuana policies,” reports Nasdaq.

Over the history of the cannabis ETF space, albeit brief, funds have shown some positive correlation to increased legalization headlines in the U.S. So as more of those scenarios emerge, POTX could benefit.

This article originally appeared on ETFTrends.com


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X