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Marijuana Stocks & ETFs: What Investors Need to Know

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  • (1:00) - Legal Cannabis Market Explosion: Growth Expectations
  • (4:40) - AdvisorShares Pure Cannabis ETF: YOLO
  • (12:25) - How Does YOLO Compare To ETFMG Alternative Harvest ETF (MJ)?
  • (19:45) - How Should Investors Navigate The Volatility Of The Marijuana Market?
  • (22:30) - AdvisorShares Vice ETF: ACT
  • (25:50) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Dan Ahrens, COO at AdvisorShares. We discuss cannabis investing and the AdvisorShares Pure Cannabis ETF (YOLO - Free Report) , which Dan manages.

The legalization of recreational cannabis in Canada has provided a big boost to the industry, which is growing and evolving rapidly.  In the US, 33 states and the District of Columbia have legalized marijuana’s medical use and supply, and ten states now allow marijuana for recreational use, but it remains illegal at the federal level.

Should we expect any change in the federal policy in the US?

YOLO, which is actively managed, focuses on companies that derive at least 50% of their revenue from the marijuana and hemp industries. Dan explains how they select constituents for inclusion in the ETF and talks about some of the top holdings includingCanadian marijuana companies like OrganiGram Holdings and Green Organic Dutchman Holdings.

Innovative Industrial Properties (IIPR - Free Report) , Aphria , CannTrust Holdings and HEXO Corp. are also among YOLO’s top holdings.

We also discuss the differences between YOLO and its competitor--the ETFMG Alternative Harvest ETF (MJ). MJ’s top holdings include Aurora Cannabis (ACB - Free Report) , Tilray (TLRY - Free Report) and Canopy Growth (CGC - Free Report) . How does active management add value in this fast-moving space?

Marijuana stocks are usually very volatile since these are mainly young and risky companies. Should investors focus on the long-term and ignore shorter-term volatility or should they look at short-term trading opportunities?

We also talk about the AdvisorShares Vice ETF (ACT - Free Report) , which focuses on alcohol, cannabis and tobacco related companies. The competition in this space will heat up further in the coming weeks as there are some more marijuana ETFs in the pipeline.  

Please visit AdvisorShares if you want to learn more about these products. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

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