YOLO: 2nd Quarter 2022 Portfolio Manager Review
It was a challenging 2nd quarter 2022 for global cannabis stocks. Based on net asset value (NAV), YOLO was down just over 50% for the full quarter. This was in part driven by broader macro weakness, as the S&P 500 Index also had a significant loss of -16.01% for the quarter.
The positions reduced the most during the quarter were cbdMD (YCBD) and Innovative Industrial Properties (IIPR). However, several positions were increased, including Clever Leaves (CLVR), Greenlane (GNLN), GrowGeneration (GRWG), High Tide (HITI), IM Cannabis (IMCC), Jazz Pharmaceuticals (JAZZ), Leafly (LFLY), Organigram (OGI), Village Farms (VFF) and WM Technologies “Weed Maps” (MAPS).
Winners and Losers
As evidenced by the performance for the quarter, most of all the stocks were down, significantly. The few bright spots were: JAZZ, which was up a few basis points for the quarter; Intercure (INCR), which was down just over 16% for the quarter; and Cardiol Therapeutics (CRDL), which was down just over 15% for the quarter. Everything else was down in a range from approximately 40% to 60% in just the 3 month period.
|Ticker||Security Description||Portfolio Weight %|
|MSOS||ADVISORSHARES PURE US CANN||34.46%|
|VFF||VILLAGE FARMS INTERNATIONAL||17.63%|
|IIPR||INNOVATIVE INDUSTRIAL PROPER||7.15%|
|JAZZ||JAZZ PHARMACEUTICALS PLC||4.37%|
|TLRY||TILRAY BRANDS INC||4.17%|
|TRSSF||TERRASCEND CORP SWAP REC||4.13%|
|RIV||RIV CAPITAL INC||3.66%|
|CGC||CANOPY GROWTH CORP||2.57%|
|MAPS||WM TECHNOLOGY INC||2.12%|
As of 06.30.2022. 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.
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Activity for international cannabis companies has been slow. Canada continues to shake out some companies, even those that are highly capitalized. With significant continuous losses, they are mostly left to wait for opportunities to grow in the U.S. Probably the biggest international cannabis news for the quarter was the arrest of Brittney Griner in Russia. While international investment opportunities are limited, but growing, some of the highlights for the quarter include:
- Bermuda House of Assembly passing adult use cannabis legislation (for the second time)
- Adult use cannabis pilot program set to launch in Switzerland
- German health minister announcement to begin cannabis legalization process
- Ukraine health minister announces a bill to legalize medical cannabis
- Brazil court rules patients can grow their own cannabis for medical purposes.
- Spain to allow medical cannabis sales in pharmacies this fall
- Albania Plans to legalize medical cannabis
In the U.S., there continues to be expansion and growth in terms of new states coming online and others expanding their current cannabis laws. On a state level, commercial sales began in New Mexico on April 1st and in New Jersey on April 21st. While sales are scheduled to begin toward the end of 2022, Connecticut signed into law legislation that legalizes and safely regulates the adult-use of cannabis in the state. This growth and expansion into new and existing states continues to grow the footprint of cannabis companies while putting pressure on neighboring states to also adopt better cannabis laws.
At a federal level, the progress has so far been frustrating. While there have been many bills that have tried to address cannabis like the MORE, CAOA, SRA, and SAFE acts, none have been able to advance to vote. The existence of so many bills is proof to us that cannabis reform is trying to be advanced and additionally, cannabis is a fairly bi-partisan issue. We remain cautiously optimistic that we will see some form of either comprehensive or incremental legislation.
We want to always remind people to think about how they want to invest in the space as YOLO is designed to be fully or mostly fully invested. It’s not a fully tactical strategy. So if you want to have a more aggressive risk managed approach to investing in this space, you will want to have a plan/strategy to trade around YOLO. Regardless of the type of investor you are, we appreciate your investment and trading of YOLO as we work to grow the ETF and continue to raise awareness around the cannabis industry and its investment opportunities.
Past Manager Commentary