YOLO: 3rd Quarter 2024 Portfolio Review
Portfolio
Performance
YOLO’s net asset value (NAV) declined by 1.71% in the third quarter of 2024, but still shows positive year-to-date performance of 10.08% as of September 30, 2024.
Portfolio
In Q3, several adjustments were made to the portfolio, including the addition of 733,296 shares of Inmed Pharmaceuticals Inc. (INM), a Vancouver-based company focused on developing proprietary small molecule drug candidates targeting CB1/CB2 receptors. Two positions, Growgeneration Corp (GRWG) and WM Technology Inc. (MAPS), were fully removed from the portfolio. Other changes involved smaller tactical adjustments.
Winners and Losers
During the quarter, OrganiGram Holdings Inc. (OGI) rose by 17.61%, RIV Capital Inc. (RIV) surged with a 51.93% gain, and SNDL Inc. (SNDL) grew by 8.42%. However, holdings with declines included: Village Farms International (VFF) down 8.82%, Ispire Technology Inc. (ISPR)with a drop of 22.44%, and High Tide Inc. (HITI) decreasing by 7.40%.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MSOS | ADVISORSHARES PURE US CANN | 48.39% |
| VFF | VILLAGE FARMS INTERNATIONAL | 7.32% |
| HITI | HIGH TIDE INC | 7.22% |
| SNDL | SNDL INC | 6.15% |
| CRDL | CARDIOL THERAPEUTICS INC-A | 5.49% |
| CRON | CRONOS GROUP INC | 3.58% |
| OGI | ORGANIGRAM HOLDINGS INC | 3.18% |
| REFI | CHICAGO ATLANTIC REAL ESTATE | 3.14% |
| AFCG | AFC GAMMA INC | 2.77% |
| TLRY | TILRAY BRANDS INC | 2.40% |
As of 9.30.2024. 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
In the U.S., the public comment period for the Drug Enforcement Administration’s cannabis rescheduling closed in July, with over 43,000 submissions, 65% of which supported descheduling or legalization. In August, the U.S. Department of Health and Human Services (HHS) recommended rescheduling cannabis from Schedule I to Schedule III. An Administrative Law Judge hearing is scheduled for December 2, 2024, with a final decision potentially going into effect by 2025. Both major presidential candidates have expressed support for cannabis reform. Rescheduling would relieve U.S. cannabis companies from the tax penalties imposed by IRS Code Section 280E and could pave the way for the SAFER Banking Act, along with stronger financial protections.
In July, Germany granted Tilray Brands Inc.’s Aphria RX facility the first cultivation license under its new Cannabis Act, MedCan-G. This license allows Aphria RX to grow and produce medical cannabis, leading to a significant increase in patients and prescribers. The German legal cannabis market is projected to reach $85.6 million (USD) by 2030, driven by the growing use of cannabis and CBD products across industries like pharmaceuticals, food and beverages, and personal care.
Meanwhile, Japan, Italy, and France faced setbacks in their cannabis industries. In September, Japan announced that recreational cannabis use and cultivation will become criminal offenses starting December 12, with prison sentences of up to seven years, though medical use will remain legal. Italy’s parliament voted to ban the sale of hemp, known as “cannabis light” products, which had been legal since 2017—a change that could cost 11,000 jobs. However, hemp remains legal for pharmaceutical and certain industrial purposes. In France, the launch of medical cannabis, initially expected by 2025, is now delayed until 2026 due to setbacks in meeting European Commission regulations.
In Q3, Colombia reported exporting over $10.8 million worth of cannabis products in 2023, with 32% of exports going to Brazil, 25% to Australia, and 14% to Germany. Australia’s medical cannabis market is projected to reach $860 million by 2030, fueled by growing public awareness of cannabis’ health benefits.
These developments reflect a growing global movement toward more relaxed cannabis regulations, spanning recreational, medicinal, and decriminalized use. Governments are increasingly driven by the potential benefits, including curbing illegal markets, boosting tax revenues, enhancing public health, and mitigating the social impacts of cannabis prohibition. As public perceptions evolve, more nations are likely to embrace progressive regulatory changes.
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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.