E "Marijuana" ETFs: The Great Pretenders

5. Amplify Seymour Cannabis ETF (CNBS):  Its stated objective is to invest at least 80% of its net assets in the securities of companies that derive 50% or more of their revenue from the cannabis and hemp ecosystem. To that end its components consist of:

  • Ancillary Goods and Services: 41.0%
  • Pharmaceutical Companies: 12.9%
  • Cash on Hand: 6.1%
  • Pure Marijuana Companies: 40.0%

6. ETFMG Alternative Harvest ETF (MJ): Its stated objective is to invest at least 80% of its total assets in companies that derive more than half their revenue from cannabis-related activities as well as companies that produce tobacco products, fertilizers, plant foods, pesticides and equipment for cannabis or tobacco. To that end its components consist of:

  • Ancillary Goods and Services: 25.8%
  • Tobacco Companies: 20.8%
  • Pharmaceutical Companies: 15.3%
  • Cash on Hand: 1%
  • Pure Marijuana Companies: 37.1%

7. Cambria Cannabis ETF (TOKE): Its stated objective is to invest at least 80% of the value of the fund's net assets in cannabis companies. To that end its components consist of:

  • Ancillary Goods and Services: 35.7%
  • Tobacco/Liquor Companies: 15.9%
  • Pharmaceutical Companies: 15.4%
  • Cash on Hand: 1.8%
  • Pure Marijuana Companies: 31.2%

8. AdvisorShares Pure Cannabis ETF (YOLO):  Its stated investment objective is to invest at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from marijuana/hemp and marijuana/hemp-related business and in derivatives or other instruments that have economic characteristics similar to such securities. To that end its components consist of:

  • Ancillary Goods & Services: 35.6%
  • Derivatives/Treasuries: 29.0%
  • Pharmaceutical Companies: 9.3%
  • Pure Marijuana Companies: 26.1%

The above information clearly shows that there is nothing "pure" about this ETF despite having the word in its name.

You can see from the above that the extent of the various categories in each of the 8 ETFs differ considerably from each other and, as such, each index presents a different picture of what is happening in the cannabis marketplace so what's an investor to do?

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Wendell Brown 1 month ago Member's comment

It doesn't seem to me that these ETF fund managers are misleading anyone, you just seem to think ETFs should be all pure-play or nothing.