AdvisorShares is getting behind a new marijuana exchange-traded fund
AdvisorShares has already built a reputation for being one of the largest sponsors of actively managed exchange-traded funds (ETF). It is now planning on getting into the cannabis industry and has filed for a cannabis ETF with the U.S. Securities and Exchange Commission (SEC). If approved, cannabis investors will soon see the AdvisorShares Pure Cannabis ETF on the NYSE under the “YOLO” ticker symbol.
According to the SEC filing, “The Fund is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp industry or that are registered with the DEA specifically for the purpose of handling marijuana for lawful research and development of cannabis or cannabinoid-related products and in derivatives or other instruments that have economic characteristics similar to such securities.”
The introduction of a new cannabis ETF could be a potential game-changer. There is only one dedicated ETF in the U.S., the ETFMG Alternative Harvest ETF, and a second futures offering would not only provide competition, but it would foster an increase in investments that will further develop the cannabis stock markets.
AdvisorShares entered the cannabis ETF fray in 2017, but that product, its Vice ETF, was not dedicated to solely the cannabis industry. It included alcohol, tobacco and cannabis stocks – mostly the first two.
YOLO could also include other elements beyond cannabis equities. The SEC filing also asserts, “Cannabis stocks may be categorized among a wide variety of sectors and industries including agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance. The types of companies that may engage in cannabis-related business include companies that conduct medical research, produce drug products, manufacture hemp products, or engage in agricultural activities, real estate activities, or financial services activities.”