Cannabis is one of the fastest growing investment themes, supported by favorable regulatory trends, increasing use cases and growing public acceptance. The AXS Cannabis ETF (THCX) is an exchange traded fund that provides investors with a liquid and diversified vehicle to gain access to the growth of the legal cannabis market. It seeks to provide investment results that correspond generally to the total return performance of the AXS Cannabis Index.
The global cannabis market is estimated to reach $630 billion by 2040 according to a Seaport Global Securities report.
THCX invests in a basket of stocks expected to benefit from growth of the hemp and legal marijuana industries (alcohol and tobacco stocks are excluded).
THCX gives investors an easier way to invest in cannabis with the convenient structure of an exchange traded fund (ETF).
Exchange: NYSE Arca
Inception Date: 7/8/2019
Distribution Frequency: Annual
Management Fee: 0.95%
Total Annual Operating Expense: 0.95%
Net Expense*: 0.75%
* The Fund's advisor has entered into a fee waiver agreement with the Fund under which it has agreed to waive or reduce its fees by 0.20% of the average daily net assets of the Fund for a period of two years from the date of the reorganization of The Cannabis ETF (the "Predecessor Fund"), a series of Spinnaker ETF Series, which is expected to occur on January 20, 2023, and it may be terminated before that date only by the Trust’s Board of Trustees. The Fund's advisor will not seek recoupment from the Fund of any amounts waived by the advisor under the fee waiver agreement.
Frequently Asked Questions
What is the symbol for the AXS Cannabis ETF?
The ticker is THCX. Think of THC, one of the major compounds found in cannabis.
When did THCX start trading?
July 9, 2019.
On which exchange is THCX listed?
It is listed on NYSE Arca.
What is the investment purpose for THCX?
The fund was designed to give investors a diversified, transparent, tax-efficient and liquid option to invest in the legal cannabis industry.
What is a cannabis company?
A cannabis company can include:
- A legal cannabis cultivator and/or producer
- A manufacturer and/or distributor/retailer of a cannabis derived consumer product
- A firm that provides ancillary products and/or services (including technology & financial) to the cannabis industry
- A company focused on the research and production of cannabis-containing pharmaceuticals or supplements, or
- A company involved in the research, testing and development of marijuana and/or an industrial cannabis derivative such as hemp.
Where can I see THCX’s portfolio?
On the holdings page here which is updated daily.
Does the fund track an index and if so, which one?
Yes, the fund is passively managed and tracks the AXS Cannabis Index. The Bloomberg ticker for the index is “THCX Index”.
What is the management fee for THCX?
The net annual fee is 0.75%. This includes a fee waiver of 0.20% until January 23, 2025.
Is there a one-pager on THCX?
Yes, please see our fact sheet here, which is updated quarterly.
How can I buy or sell THCX?
Check with your financial advisor or online broker to see if THCX is available on their platform. If it isn’t, please contact us. We are constantly working with new platforms to help on-board our ETF.
What type of order should I use when trading THCX?
While a limit order is the safest route, it may take longer for your order to get executed. If you have specific questions about a larger order size, please feel free to contact us.
Can I short sell THCX?
Yes, it may be best to check first with your financial advisor, if you have one, to understand the risks of shorting any ETF, not just THCX.
Are options listed on THCX?
Yes, THCX options were listed on July 18, 2019.
How long has cannabis been around?
While a specific date is impossible to pin down, the first medicinal usage in China is estimated to be circa 2700 BC. Cannabis is believed to have first arrived in the Americas in 1545 AD courtesy of the Spanish.
What are some applications for cannabis?
While cannabis is often viewed as a recreational lifestyle item, there are many other applications, including in the pharmaceutical market, as an additive to food and beverages, and for health and wellness products for not only humans but animals as well.
What is “CBD”?
Short for Cannabidiol, CBD is a compound (one of over 80 phytocannabinoids) found in the flower of the cannabis plant (either hemp or marijuana). CBD is believed to have non-addictive therapeutic benefits, from both a medical and wellness standpoint, with much of the research still in early stages.
How is CBD different from THC?
CBD is non-psychoactive compared to THC (tetrahydrocannabinol) which has psychoactive effects. People often refer to CBD giving you a “body high” compared to a “head high” for THC.
Are hemp and marijuana the same thing?
The short answer is “no”. Both are derivations of the Cannabis Sativa family, however, the anatomy, composition and use cases are different. Hemp contains <0.3% THC while Marijuana has abundant levels of THC with concentrations ranging from 15% – 40%.
How big is the cannabis industry and how large can it get?
According to a research report by Seaport Global Securities published on February 21, 2019, the global value at the time was over $12 billion with the potential to grow to $630 billion by 2040.
Important Risk Information
You could lose money by investing in the Fund. There can be no assurance that the Fund’s investment objectives will be achieved.
While the shares of the Fund are tradable on secondary markets, they may not trade in all market conditions and may trade at significant discounts in periods of market stress. ETFs trade like stocks, are subject to investment risks, fluctuate in market value and may trade at prices above or below the ETFs net asset value.
Regulatory Risk: The possession and use of marijuana, even for medical purposes, is illegal under federal and certain states’ laws, which may negatively impact the value of the Fund’s investments. Use of marijuana is regulated by both the federal government and state governments, and state and federal laws regarding marijuana often conflict. Even in those states in which the use of marijuana has been legalized, its possession and use remains a violation of federal law. The companies in which the Fund invests are subject to various laws, regulations and guidelines relating to the manufacture, management, transportation, storage and disposal of cannabis , as well as being subject to laws and regulations relating to health and safety, the conduct of operations and the protection of the environment. The cannabis companies may never be able to legally produce and sell products in the United States or other national or local jurisdictions. Even if a company’s operations are permitted under current law, they may not be permitted in the future, in which case such company may not be in a position to carry on its operations in its current locations.
Industry Operational Risks: Companies involved in the cannabis industry face intense competition, may have limited access to the services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions, and are heavily dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Since the cultivation, possession, and distribution of cannabis can be illegal under U.S. federal law under certain circumstances, federally regulated banking institutions may be unwilling to make financial services available to growers and sellers of cannabis.
Equity Risk: The value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.
Passive Investment Risk: The Fund is not actively managed. The Fund invests in securities included in or representative of the Index regardless of investment merit. The Fund generally will not attempt to take defensive positions in declining markets. In the event the Index is no longer calculated, the Index license is terminated or the identity or character of the Index is materially changed, the Fund will seek to engage a replacement index.
ETF Structure Risks: The Fund is an ETF, and, as a result of an ETF’s structure, it is exposed to the following risks: shares not being individually redeemable, cash transaction risk, fluctuation of net asset value risk, market maker risk, costs of buying or selling shares, trading issues risk. Please see the prospectus for more information about these risks.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns. NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the midpoint 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.