A Maryland-based investment management company said it is launching on Sept. 2 the first U.S.-listed exchange-traded fund (ETF) that will focus solely on American cannabis companies, including multistate operators.
The company said the fund, AdvisorShares Pure US Cannabis ETF, reflects the firm’s belief that the United States offers the greatest potential of any cannabis market.
The fund will trade on the New York Stock Exchange Arca under the ticker symbol MSOS.
“We believe that the U.S. clearly represents the most attractive opportunity for cannabis investment and remains an exponentially larger market than the Canadian cannabis market,” portfolio manager Dan Ahrens said in a news release.
An ETF is a collection of securities traded as one stock. That helps spread the risk, similar to a mutual fund, but ETFs can be bought and sold during the day.
Ahrens also serves as the portfolio manager of AdvisorShares YOLO, which launched in April 2019 as a cannabis-related ETF. YOLO also invests in some American MSOs but through derivative contracts.
Cannabis-focused ETFs have launched in Canada, the U.S. and Europe in recent years, but they took a beating when marijuana stocks slid – especially in the latter half of 2019 and into March 2020.
But a number of U.S. marijuana stocks have done well in recent months, mirroring the general stock market and reflecting strong company revenues during the coronavirus pandemic.
In addition to investing in multistate operators, AdvisorShares Pure US Cannabis ETF will focus on marijuana-related real estate investment trusts, CBD, hydroponics and cannabis-related pharmaceuticals.