Marijuana ETF alters back-office players after changes, queries over bank’s role

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An exchange-traded fund that invests in marijuana companies is changing its custodian, administrator and transfer agent after major changes at the ETF and questions about a bank’s role in the investment vehicle.

The $560 million ETFMG Alternative Harvest ETF – which trades under the symbol MJ – previously had U.S. Bancorp perform those duties. The bank also housed shares of cannabis producers.

But the ETF was also plagued by questions about whether U.S. Bancorp would continue the relationship because of legal and reputational risks, Bloomberg reported.

“It probably should be a big deal for investors,” Eric Balchunas, a senior analyst at Bloomberg Intelligence, told the news service.

But, he added, “I don’t think it will matter much or change MJ’s increasingly large role in the market.”

The fund, which is run by New Jersey-based ETF Managers Group, invested in Latin American real estate stocks before making the move to cannabis last year.

The ETF quickly gathered millions in assets and debuted on NYSE Arca in December.

With U.S. Bancorp out of the picture, Wedbush Securities, a Los Angeles-based brokerage, will be the fund’s new custodian, Bloomberg reported.

Administrative work will be handled by the ETF Managers Group, while Computershare Trust, a Canton, Mass.-based firm, is the new transfer agent, according to Bloomberg.