New US-Focused Cannabis ETF Launches on New York Stock Exchange
Another cannabis ETF has landed on the New York Stock Exchange.
Maryland-based investment management firm AdvisorShares Investments, LLC launched Tuesday its Pure US Cannabis ETF, an exchange-traded fund that concentrates entirely on U.S. cannabis firms, including plant-touching multistate operators (MSOs).
It is listed on the NYSE Arca exchange under the ticker symbol MSOS.
In a news release, the company said MSOS is the “first U.S.-listed ETF to deliver exposure dedicated solely to American cannabis companies,” including ventures that are “directly involved in the legal production and distribution of cannabis."
According to the AdvisorShares website, the MSOS portfolio features 24 marijuana companies. Holdings include popular publicly traded adult-use and medical cannabis firms Curaleaf, Green Thumb Industries and Trulieve, which make up about 25% of the portfolio.
MSOS also offers investors exposure to companies like Terrascend, Ayr Strategies, Cresco Labs, Columbia Care and Harvest Health & Recreation, among many others. Additionally, the ETF owns shares of Innovative Industrial Properties, a real estate investment trust that focuses on the cannabis sector and boasts 62 properties across 16 states.
In mid-2019, the company launched YOLO, which provides exposure to both U.S. and international cannabis companies, including Aphria, Aurora, Canopy Growth, and many of the U.S. firms listed above.
In a statement, AdvisorShares COO Dan Ahrens — who manages all three funds -- said the company created MSOS to meet increasing demand from investors who wanted additional U.S. cannabis exposure. He added that AdvisorShares views the U.S. sector as the “most attractive opportunity for cannabis investment,” noting that it “remains an exponentially larger market than the Canadian cannabis market.”
"We feel strongly that our active portfolio management serves as the most advantageous way to invest in the emerging cannabis space,” he said via the release.
The MSOS prospectus notes that at least 80% of its net assets will be put into “companies that derive at least 50% of their net revenue from the marijuana and hemp business in the United States.”
A third AdvisorShares fund, ACT, invests in vices like alcohol and tobacco, as well as companies with cannabis exposure.
ETFs are groups of securities that are traded like stocks under a single ticker symbol. They give investors an opportunity to purchase a range of assets without having to invest in each one individually, helping to spread risk while offering exposure to a variety of stocks.
AdvisorShares CEO Noah Hamman took to Twitter on Tuesday to share additional context about the MSOS ETF, asking potential backers to remain “patient” while noting that his company takes a “long term” investment approach.
“We are active, we are not set to some ‘rebalancing schedule",’” he wrote. “Dan [Ahrens] has had a great track record with our existing product. We love getting your feedback, but please keep it positive. I know there is a lot of passion in the space.”
Noted cannabis investor Jason Spatafora called the launch of MSOS a "great boost for the sector," and said it would "give retail and institutional investors exposure to the future winners in the North American cannabis market."
Spatafora, better known as the "Wolf of Weed Street," appears to have purchased at least 1,000 shares of MSOS. On Tuesday morning, the tweeted a screenshot of an order, executed at 10:48 A.M. ET.
Additional information about MSOS can be found in the news release, copied below.
AdvisorShares Launches Pure US Cannabis ETF (Ticker: MSOS)
BETHESDA, Md., -- AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), today announced that the AdvisorShares Pure US Cannabis ETF (Ticker: MSOS) will begin trading on Wednesday, September 2, 2020. MSOS becomes the first U.S.-listed active ETF to deliver exposure dedicated solely to American cannabis companies, including multi-state operators (MSOs). MSOs are U.S. companies directly involved in the legal production and distribution of cannabis in states where approved.
MSOS becomes AdvisorShares second dedicated cannabis investment strategy alongside the AdvisorShares Pure Cannabis ETF (Ticker: YOLO). When YOLO launched on April 18, 2019, it became the first U.S.-listed active ETF dedicated to cannabis exposure – investing in both domestic and foreign cannabis equity securities. MSOS joins YOLO as the only U.S.-listed cannabis ETFs that maintain an established, Federal bank as fund custodian.
MSOS seeks long-term capital appreciation by investing entirely in legal, domestic cannabis equity securities. MSOS' domestic equity strategy allows this active ETF to allocate its underlying portfolio among multi-state operator (MSO) companies as well as other U.S.-based cannabis-focused areas such a REITs, cannabidiol (CBD), pharmaceutical and hydroponics.
The portfolio manager of MSOS is Dan Ahrens, AdvisorShares chief operating officer, who also serves as portfolio manager of YOLO and the AdvisorShares Vice ETF (Ticker: ACT). Ahrens carries a well-established expertise of investing in cannabis and other highly regulated areas of the market.
"We are pleased to offer MSOS in addition to YOLO which we believe responds further to meeting investors' demands for more U.S. cannabis investment exposure," said Ahrens. "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. We feel strongly that our active portfolio management serves as the most advantageous way to invest in the emerging cannabis space."
AdvisorShares will host a series of investor webinars this week which will provide an overview of their cannabis investment strategies, detailed discussions about MSOS, and feature additional industry guests. The following dates include registration links to attend each session.
- Wednesday, September 2nd at 4:00pm EDT – featuring Dan Ahrens and Ben Kovler, CEO and Chairman at Green Thumb Industries
- Thursday, September 3rd at 4:00pm EDT – featuring Dan Ahrens and Steve White, CEO at Harvest, Inc.
- Friday, September 4th at 12:00pm EDT – featuring Dan Ahrens and AdvisorShares CEO Noah Hamman
AdvisorShares is a leading provider of actively managed ETFs. For financial professionals and investors requesting more information, call 1-877-843-3831 or visit www.advisorshares.com. Follow @AdvisorShares on Twitter and Facebook for more insights.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information are in the prospectus, a copy of which may be obtained by visiting the Fund's website at www.advisorshares.com. Please read the prospectus and summary prospectus carefully before you invest.
Foreside Fund Services, LLC, distributor.
The Fund is subject to a number of risks that may affect the value of its shares. This section provides additional information about the Fund's principal risks. The degree to which a risk applies to the Fund varies according to its investment allocation. Each investor should review the complete description of the principal risks before investing in the Fund. As with investing in other securities whose prices increase and decrease in market value, you may lose money by investing in the Fund.
Cannabis-Related Company Risk. Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a cannabis-related company's ability to secure financing, (ii) impact the market for marijuana industry sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis-related companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.
Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.