YOLO: 2nd Quarter 2024 Portfolio Review
Portfolio
Based on net asset value (NAV), YOLO was down 16.35% for the 2nd quarter of 2024, however it maintains positive performance year-to-date of up 12.00% (NAV) as of June 30th, 2024.
Portfolio
In Q2, several adjustments were made to the portfolio. These included the addition of 1,050,000 shares of Rubicon Organics Inc. (ROMJF), a Canadian licensed producer of organic cannabis; 26,000 shares of Skye Bioscience Inc. (SKYE), a California-based biopharmaceutical company focused on developing proprietary cannabinoid derivatives for the treatment of glaucoma and other diseases; and 200,000 shares of WM Technology Inc. (MAPS), a California-based company that streamlines retailer data to create more consistent point-of-sale and e-commerce menus. Intercure Ltd. (INCR) was also re-added to the portfolio with 107,414 shares. Intercure is an Israeli company engaged in the research, cultivation, production, and distribution of pharmaceutical-grade cannabis and cannabis-based products for medical use in Israel and internationally. Only one position, Power REIT (PW), was completely removed from the portfolio. Other changes were small tactical adjustments.
Winners and Losers
For the quarter, top 5 holdings High Tide Inc. (HITI) grew by 10.98% and Cardiol Therapeutics Inc. (CRDL) increased 11.11%. Top 10 position Ispire Technology Inc. (ISPR) performed very well with a with a gain of 30.51%.
However, the majority of the portfolio declined in the quarter. Among losers, AdvisorShares Pure US Cannabis ETF (MSOS) experienced a decline of 26.22%, Village Farms International Inc. (VFF) dropped 17.74%, and OrganiGram Holdings Inc. (OGI) saw a decrease of 27.80%.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MSOS | ADVISORSHARES PURE US CANN | 37.74% |
| HITI | HIGH TIDE INC | 9.30% |
| VFF | VILLAGE FARMS INTERNATIONAL | 8.06% |
| CRDL | CARDIOL THERAPEUTICS INC-A | 6.82% |
| SNDL | SNDL INC | 6.16% |
| CRON | CRONOS GROUP INC | 4.67% |
| REFI | CHICAGO ATLANTIC REAL ESTATE | 3.58% |
| OGI | ORGANIGRAM HOLDINGS INC | 3.54% |
| AFCG | AFC GAMMA INC | 3.50% |
| ISPR | ISPIRE TECHNOLOGY INC | 3.24% |
As of 6.30.2024. Cash is not included. Subject to change.
Please see our complete Fund holdings at advisorshares.com/etfs/yolo. The holdings details are updated each market day.
International Cannabis Landscape
Internationally, the global cannabis market is projected to reach over $64 billion in revenue in 2024 and $74 billion by 2028, as per Statista. In April, Germany has made significant strides in cannabis reform, moving towards a regulated market for recreation use and permitting adults to cultivate up to three cannabis plants for personal use. As of July 1, those who prefer not to grow their own plants can join cannabis social clubs, nonprofit cooperatives that cultivate and distribute cannabis to members under strict regulations.
Pakistan is establishing the Cannabis Control and Regulatory Authority to oversee the medical and industrial cannabis trade. This regulatory body will issue licenses to growers and sellers, designate cultivation regions, and regulate the production and sale of cannabis derivatives like THC and CBD products for medical use. This initiative is part of a broader government effort to boost exports and reduce reliance on foreign loans. Violations of regulations will be met with strict penalties.
In May, South Africa became the first African country to legalize cannabis for personal use, removing it from the Drugs and Drug Trafficking Act. Similarly, Brazil’s Supreme Court voted in June to decriminalize possession of marijuana for personal use, aiming to alleviate its prison overcrowding. However, Brazil’s laws remain vague regarding the quantities that differentiate personal use from trafficking. Like Argentina, Colombia, and Mexico, Brazil allows medicinal cannabis use under strict regulations.
Conversely, Thailand is considering re-criminalizing cannabis, a plan supported by the prime minister and proposed by the health minister, potentially to be enacted by the end of the year. Some argue that the industry is now too large to shut down entirely, with entrepreneurs preparing legal challenges if the legislation passes.
These changes reflect a global trend towards more lenient cannabis regulations, whether for recreational, medicinal, or decriminalized use. Countries are motivated by the desire to eliminate illicit markets, generate tax revenues, improve public health, and address the social consequences of cannabis prohibition. As perceptions of cannabis evolve, more nations may adopt progressive approaches to its regulation.
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Cheers,
Past Commentary
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus or summary prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
The Fund is subject to a number of risks that may affect the value of its shares. This section provides additional information about the Fund’s principal risks. The degree to which a risk applies to the Fund varies according to its investment allocation. Each investor should review the complete description of the principal risks before investing in the Fund. As with investing in other securities whose prices increase and decrease in market value, you may lose money by investing in the Fund.
Cannabis-Related Company Risk. Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a cannabis-related company’s ability to secure financing, (ii) impact the market for marijuana industry sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis-related companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.
Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.
Holdings and allocations are subject to risks and to change.
The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.