AdvisorShares’ US cannabis ETF surpasses $1bn in assets

Feb 24th, 2021 | By | Category: Equities

THEMATIC INVESTING - WEDNESDAY 29TH JUNE 2022 (08:15-11:30) - THE BILTMORE MAYFAIR, LONDON Please join us for our annual thematic investing breakfast briefing with participation from MSCI, WisdomTree, KraneShares, ETC Group / HANetf, and Global X. Please register now if you would like to attend.


AdvisorShares’ actively managed US cannabis ETF has surpassed $1 billion in assets under management, less than six months after its debut on NYSE Arca.

AdvisorShares’ US cannabis ETF surpasses $1bn in assets

Dan Ahrens, Portfolio Manager and Chief Operating Officer of AdvisorShares.

Introduced in September 2020, the AdvisorShares Pure US Cannabis ETF (MSOS US) seeks long-term capital appreciation by investing in entirely legal, domestic US cannabis equity securities.

The fund, which is up 42.3% YTD and 106.7% since inception, has chimed with thematic investors as well as those seeking a high-growth alpha opportunity to complement a broad-based equity allocation.

At its launch, it became the first US-listed ETF to focus solely on American cannabis companies, including multi-state operators (MSOs). MSOs are US companies directly involved in the legal production and distribution of cannabis at the retail level in states where approved.

In addition to MSOs, the fund includes cannabis-related REITs, medical cannabis pharmaceutical companies, manufacturers of cannabidiol products, and hydroponics equipment vendors. At least 25% of the fund is concentrated in investments in the pharmaceuticals, biotechnology and life sciences industries. There are currently 30 holdings.

It is managed by Dan Ahrens, Managing Director and Chief Operating Officer of AdvisorShares. Ahrens is the author of ‘Investing in Cannabis’ (Wiley, TBD) and ‘Investing in Vice’ (St. Martin’s Press, 2004). He also oversees the AdvisorShares Pure Cannabis ETF (YOLO US), an actively managed global cannabis fund.

Ahrens believes that continued legislative changes and social acceptance of cannabis in its various formats could lead to significant growth in cannabis-related public corporations. He also posits that companies involved in cannabis-related operations could benefit from significant merger and acquisition activity as the cannabis market matures.

An example of this is the recent $7.2 billion takeover of medical cannabinoid giant and YOLO constituent GW Pharmaceuticals by Jazz Pharmaceuticals.

“There’s a lot of excitement surrounding the cannabis investment space right now and for a variety of reasons,” said Ahrens. “We firmly believe that the US cannabis market provides a compelling long-term investment opportunity that clearly differentiates itself from other areas of the globe. Investors must exercise careful due diligence when navigating cannabis and we believe MSOS’ unique, actively managed investment mandate delivers a sought-after solution to the marketplace.”

“The overall industry and investor response to both MSOS and YOLO has been remarkable, and it has been encouraging to see their expanded availability across prominent investment platforms for advisors to access,” added Noah Hamman, Chief Executive Officer of AdvisorShares. “Dan’s portfolio management experience and expertise has been evident with these highly-specialized offerings.”

MSOS comes with a net expense ratio of 0.74%.

As yet there are no actively managed cannabis ETFs domiciled in Europe, though a couple of passive options focused on the medical segment do exist. They are the $58m Medical Cannabis and Wellness UCITS ETF (CBDX LN) referenced to the Medical Cannabis and Wellness Equity Index and the $50m Rize Medical Cannabis and Life Sciences UCITS ETF (FLWR LN) referenced to the Foxberry Medical Cannabis & Life Sciences Index. These funds come with fees of 0.80% and 0.65%, respectively, and are offered by Purpose Investments (in partnership with HANetf) and Rize ETF.

Tags: , , , , , , ,

Leave a Comment