He is portfolio manager of the AdvisorShares Pure US Cannabis ETF , the largest publicly traded cannabis fund.
Russ Prince: What is the opportunity for investors in the cannabis industry and how does AdvisorShares play a role in this opportunity? Dan Ahrens: I see cannabis offering a growth opportunity similar to that of the alcohol industry post-prohibition.
Remember, this is a multi-sector opportunity and will have a competitive impact in the leisure alcohol consumption industry, the tobacco industry, industrial hemp, and the textile industry, and perhaps the biggest impact of cannabis resides in the medical and pharmaceutical space as a real solution to combat the U.S.
While I agree that the production costs will go down over time, the investment opportunity is far more focused on the products developed from the plant.
Unlike what we have seen in the tech space where companies leverage private markets when they are smaller-sized, which only creates opportunities for accredited investors, the cannabis industry is coming to the public markets much earlier.
The second hurdle is operating within a patchwork of individual state cannabis laws throughout the United States.
I see similarities to what other innovative, disruptive companies faced, such as Uber and Airbnb who also did not fit under the existing rules and regulations for taxis and hotels.
I expect changes at the federal level at some point in the future and much progress has already been made including the 2018 Farm Act, which legalized hemp usage with limits on the amount of THC—the psychotropic portion of cannabis—that can be contained in hemp-derived products.
Investors comfortable with the risks of this emerging category may be interested in evaluating the AdvisorShares Pure US Cannabis ETF—NYSE ticker: MSOS, which as of the end of February held over $1 billion USD of assets under management making it the largest cannabis ETF.