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Why the New US Cannabis ETF is Virtually Useless for US Investors

Most US Investors Won’t Be Able to Buy Shares of the First US Cannabis ETF

Written by Jeff Siegel
Posted April 16, 2019

The first US-focused cannabis ETF is launching this week – and pot stock investors are very excited.

The only problem is, most investors won’t be able to invest in it.

You see,while this new ETF offers exposure to a basket of US cannabis assets, those who actually live in the US will find it very difficult to buy shares because of where it’s trading.

The new ETF, which is called the Horizons US Marijuana Index ETF, will trade on the NEO Exchange.

If you’re unfamiliar with the NEO exchange, don’t worry, you’re not alone.

Although I’m quite fond of this exchange, as its underlying premise is to limit predatory trading practices, it’s not an easily accessible exchange.

Most online brokerages, which is what most US investors use, don’t work with the NEO exchange.

So if you’re a regular US investor, and you want to buy shares of this new ETF, you’re probably shit out of luck.

But that’s how it goes, right?

It’s always the regular investor that gets left out of the party.

We’ve seen this with the Canadian Securities Exchange (CSE), too.

The CSE, which has become home to a number of US cannabis companies that have decided to go public, is an excellent place to find a handful of quality US pot stocks. Assuming you’re not a US investor, as most online exchanges also won’t allow you access to this exchange, either.

It’s incredibly frustrating, but I understand the situation.

As long as the prohibition of cannabis remains in place – on a federal level – it’s not particularly easy for a cannabis company to go public in the US. And while this will change, as cannabis prohibition is likely to end within the next two to three years, this doesn’t help US investors today. Which is unfortunate. Particularly with a new US cannabis-focused ETF, which most US investors will never be able to invest in.

A bitter irony, to be sure.

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