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Cannabis ETF Grows Again As Tim Seymour's Fund Enters The Fray

July 23, 2019 4:59 pm
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The universe of U.S.-listed cannabis exchange traded funds is growing rapidly as the second such fund just this month came to market Tuesday with the debut of the Amplify Seymour Cannabis ETF (NYSE:CNBS).

What To Know

CNBS is an actively managed fund and the second active fund in the cannabis ETF arena. Long-time CNBC contributor and cannabis investor Tim Seymour runs the new Amplify ETF.

“The global legal cannabis industry is still very much in its infancy and presents an attractive growth opportunity for investors looking to capitalize on this emerging frontier,” Seymour said in a statement. “Amplify has a track record of offering investors access to disruptive areas of the market via the ETF structure, and the cannabis industry certainly fits this mold.”

Benzinga's Cannabis Capital Conference heads to Detroit on Aug. 15 — click here to learn more!

Why It's Important

CNBS is the second marijuana ETF to debt this month in the U.S. and the second one with backing from CNBC personalities. The Cannabis ETF (NYSE:THCX), which launched earlier this month, is passive fund backed by options gurus and Pete And Jon Najarian.

CNBS has some requirements for entry. It's expected that most of the time at least 80% of its portfolio will be at allocated to companies deriving 50% or more of their revenue from cannabis and hemp sales and production.

“Companies in the CNBS portfolio must be federally legal in the countries they operate and fall into three distinct categories: cannabis/hemp plant, support cultivation and retail, and ancillary companies that provide services and products to the broader cannabis market,” according to the statement.

Home to 25 stocks, the new CNBS features Aurora Cannabis (NYSE:ACB), Canopy Growth Corp.(NYSE:CGC), Hexo Corp. (NYSE:HEXO) and Tilray, Inc. (NASDAQ:TLRY) among its top 10 holdings.

What's Next

CNBS and its active management style could prove attractive to investors that like smaller cannabis names but want to forego stock-picking in that volatile area. Sixty-eight percent of CNBS is allocated to stocks designated as micro- or small-cap names.

CNBS allocates 61% of its weight to cultivation and retail names and over 20% of its lineup to makers of cannabis-infused products.

The new ETF charges 0.75% per year, or $75 on a $10,000 investment.

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