Technical Adjustment | Cannabis Index (.POTX) | November 2022

Today, on the 10/11/2022, Solactive announces the following technical adjustment to Section 1.5 of the methodology for the following Indices (the ‘Affected Indices’):

Rationale for the Technical Adjustment

Due to the current  market environment within the cannabis space, especially the strong drop in stock prices and liquidity, it can no longer be ensured that a sufficient amount of index member can be met to fulfill the weighting requirements as reflected in Section 1.5 of the Methodology.

Therefore, section 1.5 will be adjusted in the following manner to ensure that the weighting requirements can be fulfilled for the November 2022 Selection:

From:

On each Selection Day, the Index Components of the Cannabis Index are weighted according to Free Float Market Capitalization subject to the following constraints:

1. The maximum weight of a company is 8.0%.
2. The minimum weight of a company is 0.3%.
3. The aggregate weight of companies with weight above 4.5% cannot exceed 48% of the index weight.
4. The aggregate weight of Pre-Revenue Companies (as defined in Section 4) cannot exceed 10% of the index weight, and the maximum weight of a Pre-Revenue Company is 4.5%.

The excess weight that results from implementing these constraints is redistributed proportionally such that none of the above constraints are breached.

To:

On each Selection Day, the Index Components of the Cannabis Index are weighted according to Free Float Market Capitalization subject to the following constraints:

1. The maximum weight of a company is 16.0%.
2. The minimum weight of a company is 0.3%.
3. The aggregate weight of companies with weight above 4.5% cannot exceed 48% of the index weight.
4. The aggregate weight of Pre-Revenue Companies (as defined in Section 4) cannot exceed 10% of the index weight, and the maximum weight of a Pre-Revenue Company is 4.5%.

The excess weight that results from implementing these constraints is redistributed proportionally such that none of the above constraints are breached.