Published on
December 31, 2020

Horizons Files Preliminary Long Form Prospectus For First Psychedelic ETF

Companies Mentioned
No items found.
People Mentioned

The ETF seeks to replicate, to the extent possible and net of expenses, the performance of a market index that is designed to provide exposure to the performance of a basket of North American publicly-listed life sciences companies having significant business activities in, or significant exposure to, the psychedelics industry. Currently, the ETF seeks to replicate the performance of the North American Psychedelic Stock Index, net of expenses. See “Investment Objective”.

Preliminary Long Form Prospectus Link


This prospectus qualifies the distribution of Units of the ETF, an exchange traded fund that is expected to invest in, and indirectly derive revenues from, companies in the psychedelics industry engaged in legal activities involving psychedelic drugs and substances. While the medical and adult use of certain psychedelic drugs and substances are generally prohibited under U.S. federal law, despite this prohibition, a limited number of states have either sought to decriminalize or authorize the medical use of certain psychedelic drugs and substances in limited circumstances. Clinical trials involving psychedelic drugs and substances are, however, permitted, provided they comply with both state and federal laws applicable to such trials. The ETF will passively invest in companies engaged in legal activities involving psychedelic drugs and substances in the U.S. where state and federal laws permit such activities. Such companies may also be involved in the Canadian legal psychedelics industry.


Psychedelic drugs and substances in Canada are primarily regulated under the Controlled Drugs and Substances Act (the “CDSA”), the Food and Drug Act and the regulations promulgated thereunder. The medical use of certain psychedelic drugs and substances remain illegal under Canadian federal law unless discretionary exemptions are granted under the CDSA, while a limited number of other drugs and substances may be prescribed by a health care practitioner to patients under their care. Adult recreational use of psychedelic drugs and substances remains generally prohibited under the CDSA. Commercial activities involving psychedelic drugs and substances are permitted in Canada by parties who hold the required federal regulatory approvals and licences; however, distribution and sales opportunities for psychedelic drugs and substances are heavily restricted at this time. The ETF will passively invest in companies engaged in activities involving psychedelic drugs and substances in Canada where permitted by provincial and federal laws. The ETF will not be directly engaged in the manufacture, importation, possession, use, sale or distribution of psychedelic drugs or substances in either Canada or the U.S.


The ETF, through the ownership of life science companies in the psychedelic industry, may also have some exposure to the legal marijuana market in Canada, and the hemp industry and/or marijuana industry in certain U.S. states that have legalized marijuana for therapeutic or adult-use, which is currently illegal under U.S. federal law. However, the ETF will not be directly engaged in the manufacture, importation, possession, use, sale or distribution of hemp or marijuana in either Canada or the U.S. Unless and until the Controlled Substances Act of 1970 (the “CSA”) is amended with respect to marijuana (and there can be no assurance as to the timing or scope of any such potential amendments), there is a risk that U.S. federal authorities may enforce current federal law, including the CSA, which may adversely affect the current and future investments of the ETF in the U.S. As a result, there are a number of risks associated with the ETF’s future investments in the U.S. Such investments may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in Canada. Such investments may become the subject of heightened scrutiny by service providers to the ETF, which may affect the ETF’s ability to retain such service providers. The ETF may therefore become subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of restrictions on the ETF’s ability to invest in the U.S. or any other jurisdiction.