The first week of trading for the new Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ) (OTC: HMLSF) has been a tremendous success. While Tuesday saw its first decline after a sharp reversal from new highs early in the morning, the ETF has gained 12.2% since its debut, rising from $10.00 to $11.22 after trading as high as $12.40, with very strong trading volume. On Tuesday, 2.888mm shares traded ($33mm) on the TSX, the first day to exceed the initial day’s 2.27mm shares.

Source: TMXmoney.com

Including other exchanges, the traded value and volume also set records on 4/11, with over 4.6mm shares trading:

Source: StockWatch.com

Horizons opted to exclude two of the sixteen companies in the Soloactive North American Medical Marijuana Index, CannaRoyalty (CSE: CRZ) (OTC: CNNRF) and Maple Leaf Green World (TSXV: MGW) (OTC: MGWFF), presumably over concerns about their involvement in the federally illegal U.S. market. The ETF’s initial positions were in Aphria (TSX: APH) (OTC:APHQF), Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), CanniMed Therapeutics (TSX: CMED) (OTC: CMMDF), Canopy Growth (TSX: Weed) (OTC: TWMJF), Cronos Group (TSXV: MJN) (OTC: PRMCF), Emblem Corp (TSXV: EMC) (OTC: EMMBF), Emerald Health Therapeutics (TSXV: EMH) (OTC: TBQBF), GW Pharma (NASDAQ: GWPH), ICC International Cannabis (TSXV: ICC) (OTC: ICCLF), Insys (NASDAQ: INSY), Organigram (TSXV: OGI) (OTC: OGRMF), Scotts MiracleGro (NYSE: SMG), Supreme Pharma (CSE: SL) (OTC: SPRWF) and Zynerba (NASDAQ: ZYNE). Here were the weightings selected on April 4th in advance of the debut of trading:

According to the Horizons website, the net assets as of 4/11 have increased by 780% over the past week, rising from $10mm to $88.093mm. The demand for the ETF has fueled buying in the underlying securities. The first panel includes the 9 Canadian licensed producers:

Two of the smaller holdings have performed the best, Emblem and Emerald, both of which have relatively small floats and have gained 32%. The remaining 5 holdings have not fared as well as the Canadian LPs, with the exception of ICC, the best performer of all of the holdings thus far:

HMMJ has been a big success so far, with investors piling into the ETF. The buying has thus far helped fuel a rally in the majority of the stocks held by the ETF, with the biggest impact on some of its smaller holdings. Not surprisingly, the largest market caps names, SMG, GWPH and WEED, have been the least impacted.

Exclusive article by Alan Brochstein, CFA

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email