YOLO: 1st Quarter 2021 Portfolio Manager Review
In the 1st quarter of 2021, AdvisorShares Pure Cannabis ETF (NYSE: YOLO) gained 38.19 % on its net asset value (NAV) and 38.86 % on its market price for the 3-month period. For the one-year period, April 1, 2020 through March 31, 2021, YOLO gained 208.20 % on its NAV and 210.79 % on market price. Remember that March and April 2020 were a rather low point for the overall market as investors reacted to COVID-19. While these high returns may not be sustainable all the time, we are optimistic for future growth in the space.
The first quarter of 2021 feels like it was a lot longer than three months! It’s had a little of everything. Cannabis stocks as a whole carried strong momentum through January but have lagged since. Historically, cannabis seems to take an annual Spring downturn. And we all know that federal reform is moving much slower than many investors expected. Along with the recent negativity, U.S. cannabis stocks underperformed their Canadian counterparts. I think this is nonsensical and won’t last. We obviously like a number of Canadian LPs of course, but we overweight what we believe are the right ones – those with solid balance sheets, revenue growth and (hopefully) even profitability.
For those that read my commentary from last year, you know that I said cannabis stock performance would separate. From current cannabis stock prices and as we head through 2021, I think there will be a separation between companies with strong balance sheets and those without, companies with growing revenues and profits vs. those without, and in many cases – between those on the U.S. side of the border and besides a select few – those in Canada.
During the quarter, YOLO added new securities of Israeli company IM Cannabis Corp (NASDAQ: IMCC), Columbian-focused company PharmaCielo LTD (TSX: PCLO), and American CBD company HempFusion Wellness (TSX: CBD.u). We also added a new swap position of SOL Global Investments Corp (OTC SOLCF – swap) that we like for its underlying cannabis exposure and U.S. exposure in particular.
Winners and Losers:
During the 1st quarter, a few of the Fund’s largest holdings were among the best performers. GW Pharmaceuticals (NASDAQ: GW) gained 87% on buyout news. Aphria (MNASDAQ: APHA) was up 165% on its Tilray deal. Largest holding Village Farms International (NASDAQ: VFF) gained 30%. Some ancillary and CBD companies provided good gains. GrowGeneration (NASDAQ: GRWG) was up 23% and GreenLane Holdings (NASDAQ: GNLN) gained 33%. Charlotte’s Web (TSX: CWEB) gained 36%, and cbdMD (NYSE American: YCBD) was up 40%. U.S. multi-state operators were a mixed bag. Curaleaf (OTC CURLF – swap) gained 26%, Trulieve (OTC TCNNF – swap) gained over 43%, and Green Thumb Industries (OTC GTBIF – swap) gained over 20%, and Cresco Labs (OTC CRLBF – swap) gained 26%. The MSOs were solid, but many people viewed them as underperforming. YOLO (and some other competitor cannabis ETFs) outperformed our sister fund – AdvisorShares Pure US Cannabis (ticker: MSOS) – for the three month period, but it’s a little misleading due to the huge returns of Canada’s Aphria and the UK’s GW Pharma.
The Fund’s losers were few, and often involved new positions that may have provided good entry points. Negative returns in the three month timeframe came from smaller existing positions Neptune Wellness (NASDAQ: NEPT) down 15%, Medipharm Labs (TSX: LABS) down 12%, and Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) down 9%. New positions mentioned above HempFusion, IM Cannabis, PharmaCielo were also negative over the quarter.
|Ticker||Security Description||Portfolio Weight %|
|VFF||VILLAGE FARMS INTERNATIONAL||14.14%|
|IIPR||INNOVATIVE INDUSTRIAL PROPER||8.33%|
|CGC||CANOPY GROWTH CORP||7.50%|
|CURLF||CURALEAF HOLDINGS INC SWAP REC||5.61%|
|GTBIF||GREEN THUMB INDUSTRIES SWAP REC||5.26%|
|CRLBF||CRESCO LABS INC SWAP REC||4.70%|
|GWPH||GW PHARMACEUTICALS -ADR||4.52%|
|TCNNF||TRULIEVE CANNABIS SWAP REC||4.35%|
As of 03.31.2021. Cash is not included.
Please see our complete Fund holdings at advisorshares.com/etfs/yolo. The holdings details are updated each market day.
Past Manager Commentary