Dan Ahrens Discusses MSOS ETF and Cannabis Market Trends

The TDR Three Key Takeaways regarding Dan Ahrens insight on MSOS ETF and Cannabis Market Trends:

  1. Dan Ahrens highlights the significance of federal reform and farm bill impacts on hemp.
  2. Tilray’s missed opportunity in hemp-derived beverages sooner according to Dan Ahrens.
  3. Dan clarified that uplisting would start with companies ready for the transition, like Curaleaf and TerrAscend, due to their Toronto Stock Exchange listings.

In yesterday’s podcast episode of “Trade to Black”, Dan Ahrens, Managing Director at AdvisorShares, shared his insights on the MSOS ETF and the broader cannabis market. During the session, he addressed several questions from the hosts and audience, providing valuable information on various aspects of cannabis investments.

Dan Ahrens began by discussing the strategic acquisition of shares in Grown Rogue. Ahrens explained that his fund acquired a significant number of shares due to the company’s positive outlook. He emphasized the importance of finding a fair price, and balancing the goal of minimizing costs while recognizing the stock’s future potential.

When asked about the recent market trends, particularly the performance of MSOX with a double-digit green day, Ahrens highlighted his belief in investing heavily in top-tier MSOs like GTI and Curaleaf. He noted that these companies represent the largest weights in the fund. Ahrens also mentioned the impact of federal reform and the farm bill on the hemp business, acknowledging the slow progress due to political dynamics.

The discussion shifted to Tilray’s (NASDAQ: TLRY, TSX: TLRY) strategy, particularly in the context of hemp-derived products. Ahrens expressed surprise that Tilray had not yet announced involvement in this market segment, especially given their strong brand presence in the Southeast with the SweetWater brand. He suggested that Tilray might have missed an opportunity by not capitalizing on hemp-derived beverages sooner.

Regarding the uplisting of MSOs to major stock exchanges, Dan Ahrens explained that the process would be gradual. When asked if all MSOs need to uplist before the fund can uplist, he clarified that uplisting would occur for companies that have their regulatory and compliance aspects in order, starting with those ready for the transition. He predicted that companies like Curaleaf (TSX:CURA, OTCQX:CURLF) and TerrAscend (TSE: TSND, OTCQX: TSNDF) might lead the way due to their existing listings on the Toronto Stock Exchange.

Ahrens also addressed the question of whether uplisting would phase out the swap structure of ETFs. He explained that, under current regulations, the fund would still use total return swaps for a portion of its holdings. This approach allows the fund to maintain a balanced and diversified portfolio, even if some companies uplist.

The potential first MSO to uplist was a topic of interest. Ahrens suggested that Curaleaf and Terrasend are strong candidates due to their existing listings in Toronto. However, he noted that GTI (CSE: GTII, OTCQX: GTBIF) and Cresco (CSE: CL, OTCQX: CRLBF) could also be in the running, depending on their readiness and strategic decisions.

In discussing the fund’s composition, Dan Ahrens mentioned that the MSOS ETF holds about 25 to 30 companies. He explained that the uplisting of these companies would not happen all at once but rather over a period of time, as each company becomes ready. This staggered approach would allow the fund to adapt and invest in these companies as they uplist.

A question about the percentage of MSO swaps already IPO or with OTC was also addressed. Ahrens clarified that every company in the fund is listed on an exchange, typically on the CSE or Neo in Canada, and trades OTC in the U.S. The fund trades the U.S. line for swaps, ensuring that all holdings are compliant with regulatory standards.
Throughout the session, Dan Ahrens emphasized the importance of transparency and engagement with investors. He encouraged listeners to stay informed and educated about the cannabis industry, highlighting the fund’s commitment to providing balanced and insightful information. He also stressed that the industry has tremendous upside potential, with various catalysts on the horizon, including potential reforms in Ohio and Pennsylvania and the impact of safe banking reforms. Want to be updated on Cannabis, AI, Small Cap, and Crypto? Subscribe to our Daily Baked in Newsletter!

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