There's a controversial new way to invest in weed companies that doesn't involve buying any stock

• Rex Shares on Wednesday launched the MicroSectors Cannabis 2X Leveraged ETN, ticker MJO.
• It's the first-ever leveraged cannabis exchange-traded note in the US. It started trading on the NYSE Arca Wednesday.
• The product gives investors exposure to the cannabis industry without owning any individual stocks.
• Read more on Business Insider.

For investors looking to gain from the booming cannabis industry without betting on or owning individual stocks, there's a new investment vehicle ready to trade.

Rex Shares on Wednesday launched the first leveraged cannabis exchange-traded note in the US, called the MicroSectors Cannabis 2X Leveraged ETN, ticker MJO, according to regulatory filings.

The product is for investors who want exposure to the "entire ecosystem," Scott Acheychek, president of REX Shares, which manages the fund, told Bloomberg News in an interview. The cannabis industry is booming, and could hit $75 billion in US sales by 2030, according to an estimate by Cowen.

The fund also exposes investors to companies in the industry beyond cultivators, which have been volatile this year, Acheychek told Bloomberg. Most recently, four well-known cultivators' stocks slipped after weak quarterly earnings.

Unlike owning an individual company stock or an exchange-traded fund, which is a basket of securities like stocks or bonds, an exchange-traded note - or ETN - is a collection of unsecured debt securities that tracks an underlying index of securities. They both trade on exchanges like stocks. ETNs are usually sold by banks.

A leveraged ETN, like MJO, is designed to boost the returns of the index it tracks through debt and financial derivatives.

There is also some controversy around ETNs, which are risky debt securities. In 2018, investors were caught off guard when a record spike in the Cboe Volatility Index, or VIX, spelled the end of the VelocityShares Daily Inverse VIX Short-Term ETN (XIV), which tracked the index.

The MJO fund tracks the Indxx MicroSectors North American Cannabis Index, which follows the performance of companies with products or services related to medical or industrial cannabis use, according to REX Shares.

The group also launched a non-leveraged cannabis ETN, called the MicroSectors Cannabis Index ETN, ticker MJJ, on Wednesday. The funds charge 95 basis points and 70 basis points, respectively.