The cannabis industry saw several notable developments during the third quarter of 2019.

• In an historic move, the House of Congress voted 321 to 103 to pass the SAFE Banking Act on September 25. Senate will now consider and vote on the SAFE Banking Act. If the bill is passed by Senate, it would then be submitted for Presidential approval. Although approval of the SAFE Banking Act would not fully legalize cannabis,

it would represent a large step towards normalization of the U.S. marijuana industry as the Act prevents the federal government from taking action against banks, insurers and landlords that provide services to cannabis companies that operate in compliance with applicable state laws.

Executive Summary

QUARTERLY COMMENTARY2019 Q3

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COMMENTARY

• Four years after lawmakers initially agreed to give patients access to therapeutic cannabis, Louisiana became the first state in the Deep South to dispense medical marijuana on August 6. Louisiana regulators have issued nine licenses to pharmacies to dispense medical marijuana, and as of late July, approximately 80 doctors were licensed to recommend the drug to patients.

• In September, GW Pharmaceuticals (NSDQ: GWPH) received approval from the European Commission to market EPIDYOLEX® (known as EPIDIOLEX® in the United States) for use as adjunctive therapy of seizures associated with Lennox‑Gastaut syndrome or Dravet syndrome. The approval paves the way for the launch of EPIDYOLEX®

across Europe. The CBD based medicine launched in the United States in late 2018 after becoming the first plant‑based cannabis drug to receive FDA approval. GW Pharmaceuticals has seen strong sales in the first half of 2019 with over 12,000 patients receiving EPIDIOLEX® prescriptions.

• Imperial Brands PLC (LSE: IMB) completed its C$123 million investment in Auxly Cannabis Group Inc (TSX.V: XLY) in late July. The investment was made by way of a debenture that is convertible into 19.9% ownership of

EXECUTIVE SUMMARY (CONTINUED)

Auxly. Aside from obtaining capital at a premium to their share price, Auxly also received the rights to Imperial Brands’ vaping technology and intellectual property for cannabis use globally; was granted access to Imperial Brands’ vapor innovation business; became Imperial Brands’ exclusive partner for the future development, manufacture, commercialization, sale and distribution of cannabis products of any kind anywhere in the world; and strengthened its governance through the addition of one director nominee and one non‑voting observer to Auxly’s Board of Directors (each to be designated by Imperial Brands).

• In August, Sundial Growers Inc. (NSDQ: SNDL) completed the closing of its initial public offering for gross proceeds of US$143,000,000. Sundial operates five facilities (two facilities in Alberta and three in the United Kingdom) and is currently building a third Canadian facility in British Columbia.In June, Illinois became the 11th state to legalize marijuana for recreational purposes. It is also the first state where legalization was approved by legislature. Illinois’s marijuana legalization law will allow recreational possession and sales starting on January 1, 2020, creating a new system of taxes and regulations.

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COMMENTARY

Fund PerformanceMJ’s 3Q 2019 return was ‑33.7% continuing its slide from the second quarter 2019 performance. This brings MJ’s YTD return to ‑15.0% and a reminder to investors of the potential for volatility in the cannabis space.

Looking at sector performance, Materials (specifically Schweitzer‑Mauduit International, Inc.) was the most significant positive contributor, with a 14.3% return for Q3. The rest of the sectors in the portfolio were down. Health Care (‑40.4%), Financials (‑32.9%) and Real Estate (‑30.4%) were the largest negative returns at the sector level.

SECTOR CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%) SECTOR CONTRIBUTION (%)

Health Care 74.04 ‑42.95 ‑31.80

Consumer Staples 17.28 ‑4.32 ‑0.75

Materials 3.71 7.74 0.29

Real Estate 2.16 ‑39.16 ‑0.85

Industrials 1.62 ‑12.16 ‑0.20

Financials 1.10 ‑34.36 ‑0.38

Other 0.09 0.19 0.00

At the security level, Vector Group Ltd (VGR, +32.3%), Schweitzer‑Mauduit Intl Inc (SWM, +14.3%) and 22Nd Century Group Inc (XXII, +8.4%) contributed positively to return. This was more then offset by Canopy Growth Corp (WEED CN, ‑45.2%), Zynerba Pharmaceuticals Inc (ZYNE, ‑44.2%) and Aurora Cannabis Inc (ACB CN, ‑44.0%).

TOP 10 POSITIVE CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)

VECTOR GROUP LTD 1.88 32.28 0.43

SCHWEITZER‑MAUDUIT INTL INC 1.89 14.29 0.19

22ND CENTURY GROUP INC 2.05 8.13 0.24

BRITISH AMERICAN TOBACCO PLC 1.67 5.95 0.08

SCOTTS MIRACLE-GRO CO 1.82 3.94 0.09

CANOPY GROWTH CORP 0.11 3.51 0.21

JAPANESE YEN 0.00 ‑0.36 0.00

JAPAN TOBACCO INC 1.67 ‑0.90 ‑0.02

PHILIP MORRIS INTERNATIONAL 1.64 ‑1.73 ‑0.02

SWEDISH MATCH AB 1.65 ‑1.98 ‑0.02

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COMMENTARY

TOP 10 NEGATIVE CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)

AURORA CANNABIS INC 7.87 ‑44.01 ‑3.79

ZYNERBA PHARMACEUTICALS INC 2.80 ‑44.21 ‑1.30

CANOPY GROWTH CORP 7.04 ‑45.21 ‑3.68

EMERALD HEALTH THERAPEUTICS 1.12 ‑46.31 ‑0.53

ORGANIGRAM HOLDINGS INC 3.73 ‑46.73 ‑1.86

TILRAY INC‑CLASS 2 COMMON 7.28 ‑46.86 ‑3.66

KHIRON LIFE SCIENCES CORP 0.65 ‑48.05 ‑0.35

TURNING POINT BRANDS INC 1.50 ‑52.83 ‑0.89

FLOWR CORP/THE 0.28 ‑55.88 ‑0.18

CANNTRUST HOLDINGS INC 2.95 ‑77.58 ‑3.69

In terms of fundamental factor performance, factors contributing positively were the portfolio’s exposures to the style factor Growth, Momentum as well as Global Markets. On the negative side, Health Care, Earnings Variability and Trade Activity were the largest detractors.

TOP 6 FACTOR CONTRIBUTORS

AVG. WEIGHT (%)

TOTAL RETURN (%)

FACTOR CONTRIBUTION (%)

BOTTOM 6 FACTOR CONTRIBUTORS

AVG. WEIGHT (%)

TOTAL RETURN (%)

FACTOR CONTRIBUTION (%)

Style:CA Growth 1.04 1.97 1.56Industry:CA HealthCar

0.42 ‑20.19 ‑7.96

NorthAm:CA Market

0.56 1.74 0.83Style:CA EarnVarib

1.45 ‑3.34 ‑4.14

Style:CA Momentum

0.58 0.75 0.57Style:CA TradeAct

1.57 ‑2.76 ‑3.82

NorthAm:US Market

0.35 1.08 0.24Style:CA Leverage

‑0.51 3.04 ‑1.33

Industry:US ConsmrPr

0.1 2.3 0.21Industry:US PharmBio

0.19 ‑7.05 ‑1.08

Industry:US HomePrd

0.02 8.98 0.13 Style:CA Size ‑1.02 0.64 ‑0.6

FUND PERFORMANCE (CONTINUED)

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COMMENTARY

FUND PERFORMANCE (CONTINUED)

The breakdown of the style factors shows the most significant positive contributions coming from Growth, Momentum and Dividend Yield; while the main detractors were Earnings Variability and Trade Activity.

STYLE RETURN CONTRIBUTION

Momentum 0.22

Value ‑0.06

Dividend Yield 0.05

Size 1.2

Trading Activity ‑4.08

Earnings Variability ‑4.6

Profitability ‑0.59

Volatility ‑0.96

Growth 1.6

Leverage ‑1.43

Total Return: Q3 2019

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COMMENTARY

CUMULATIVE ANNUALIZED

1 MONTH 3 MONTH YTD SINCE INCEP. 1 YEAR 3 YEARS 5 YEARS 10 YEARS SINCE INCEP.

MARKET PRICE ‑12.51% ‑33.70% ‑15.06% 1.61% ‑46.12% ‑5.98% 0.42%

NAV ‑12.45% ‑33.41% ‑14.46% 5.77% ‑45.55% ‑5.08% 1.48%

Performanceas of 9/30/19

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Funds may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477), or by visiting www.etfmj.com/MJ. Performance is annualized for periods greater than 1 year.

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s statutory and summary prospectus, which may be obtained by calling 1-844-383-6477, or by visiting www.etfmj.com/MJ. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility. The possession and use of marijuana, even for medical purposes, is illegal under federal and certain states’ laws, which may negatively impact the value of the Fund’s investments. Use of marijuana is regulated by both the federal government and state governments, and state and federal laws regarding marijuana often conflict. Even in those states in which the use of marijuana has been legalized, its possession and use remains a violation of federal law. Federal law criminalizing the use of marijuana pre‑empts state laws that legalizes its use for medicinal and recreational purposes. Cannabis companies and pharmaceutical companies may never be able to legally produce and sell products in the United States or other national or local jurisdictions.

The Fund does not invest in any U.S. or foreign company whose business activities are illegal under any applicable federal or state law.

The Fund’s investments will be concentrated in an industry or group of industries to the extent that the Index is so concentrated. In such event, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries. The consumer staples sector may be affected by the permissibility of using various product components and production methods, marketing campaigns and other factors affecting consumer demand. Tobacco companies, in particular, may be adversely affected by new laws, regulations and litigation. The consumer staples sector may also be adversely affected by changes or trends in commodity prices, which may be influenced or characterized by unpredictable factors.

The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial is not affiliated with Prime Indexes.

On December 26, 2017, the Fund’s investment objective and principal investment strategy were substantially revised; therefore, the performance and average annual total returns shown for periods prior to December 26, 2017 is likely to have differed had the Fund’s current investment strategy been in effect during those periods. The Fund’s prior investment objective sought to provide investment results that corresponded to the performance of the Solactive Latin America Real Estate Index, which tracked equities with primary listings in the Latin America region that derived most of their income from real estate and real estate services.

Fund Inception: 12/02/15 Expense Ratio: 0.75%

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COMMENTARY

STYLE FACTOR DESCRIPTION DATA USED

MomentumSeparates stocks that have outperformed over the past year and those that have underperformed.

Cumulative return over one year (averaged), skipping the most recent two weeks

ValueA composite metric that differentiates “rich” and “cheap” stocks. Bloomberg combines fundamental and analyst consensus data to calculate this factor.

Book to Price, Earnings to Price, Cash Flow to Price, Sales/EV, EBITDA/EV, Forecast Earnings to Price,

Dividend Yield

Most recently announced net dividend (annualized) divided by the current market price

Most recently announced net dividend (annualized) divided by the current market price

SizeA composite metric distinguishing between large and small stocks.

Market Capitalization, Sales, Total Assets

Trading Activity

A turnover based measure. Bloomberg focuses on turnover which is trading volume normalized by shares outstanding. This indirectly controls for the Size effect.

The exponential weighted average (EWMA) of the ratio of shares traded to shares outstanding

Earnings Variability

Gauges how consistent earnings, cash flows, and sales have been in recent years.

Earnings Volatility to Total Assets, Cash Flow Volatility to Total Assets, Sales Volatility to Total Assets

ProfitabilityStudies firms’ profit margins to differentiate between money makers and money losers.

Return on Equity, Return on Assets, Return on Capital Employed, EBITDA Margin

VolatilityDifferentiates more volatile stocks and less volatile ones by quantifying “volatile” from several different angles.

Rolling Volatility, Rolling CAPM Beta, Historical Sigma, Cumulative Range

GrowthAims to capture the difference between high and low growers by using historical fundamental and forward‑looking analyst data.

Total Asset Growth, Sales Growth, Earnings Growth, Forecast of Earnings Growth, Forecast of Sales Growth

LeverageA composite metric to gauge a firm’s level of leverage.

Book Leverage, Market Leverage, Debt to Total Assets

Definitions