Receive the Cannabis Recap each week
CNBS is an ETF investing in the fast-developing global cannabis industry. The Fund is managed by Tim Seymour, a recognized voice and experienced investor in the cannabis space.
Each week Tim covers the key headlines, developments and drivers for a sector always on the move. Listen on-demand and access his weekly written commentary.
Headlines (week ending 8/21/20)
1. Overall Market: The cannabis sector was down last week, but the overall good news remains the strong earnings results and the positive developments a lot of the big players are exhibiting. Tim covers Cresco and Curaleaf results.
2. Macro/Legislative: The Biden administration alluded to cannabis decriminalization before focusing on full-scale legalization. Vermont steps closer to full legalization. Brazil's plan for legal cultivation of hemp is moving ahead.
3. CNBS ETF: Currently at 23 holdings. The big performer the past two weeks has been GrowGen. We also added to the GW Pharma position. Sentiment in the CBD and hemp world is improving, with M&A activity as an indicator.
From inside the cannabis industry, delivering active portfolio management in cannabis.
Past performance does not guarantee future results. The performance of individual companies in the cannabis sector is provided for informational purposes only and does not represent the Fund.
Why Invest in Cannabis-Related Companies
Worldwide consumer spending on legal cannabis was $12.2 billion in 2018. 2019 sales are expected to grow 38% from 2018.
65% of Americans think cannabis should be legal (according to a CBS poll - as of April 2019.) Increased political momentum and public pressure to legalize its use for medical and recreational purposes, have led to new and innovative applications in product-related and service areas, driving global technological and scientific breakthroughs.
Growing Trend of Legalization
There are over 100 naturally occurring compounds - found in the cannabis plant known as cannabinoids. Cannabis is being researched to treat nausea for cancer patients, and treating seizures. Cannabis is also being used as a treatment for, inflammation, anxiety, sleep disorders, pain management, and PTSD.
Source: BDS Analytics, Arcview Market Research
Click here for CNBS holdings.
The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies, and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund. There is no guarantee that any projection, forecast or opinion will be realized. The views expressed may change at any time after the date of this publication.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained above or by calling 855-267-3837, or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV, and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The Fund is subject to management risk because it is actively managed. Companies involved in the cannabis industry face competition, may have limited access to the services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions, and are heavily dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. The possession and use of cannabis, even for medical purposes, is illegal under federal and certain states’ laws, which may negatively impact the value of the Fund’s investments. Securities issued by non-U.S. companies present risks beyond those of securities of U.S. issuers.
Many of the companies in which the Fund will invest are engaged in other lines of business unrelated to cannabis and these lines of business could adversely affect their operating results. Cannabis is a Schedule I controlled substance under the Controlled Substances Act (“CSA”), meaning that it has a high potential for abuse, has no currently “accepted medical use” in the U.S., lacks accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the U.S. Small and/or mid-capitalization companies may be more vulnerable to adverse general market or economic developments, and their securities may be less liquid and may experience greater price volatility than larger, more established companies as a result of several factors, including limited trading volumes, products or financial resources, management inexperience and less publicly available information. The Fund is non-diversified, which can cause greater share price fluctuation.
Amplify Investments LLC is the Investment Adviser to the Fund, and Penserra Capital Management, LLC serves as the Investment Sub-Adviser.
Amplify ETFs are distributed by Foreside Fund Services, LLC.
Glossary of Terms
M&A: mergers & acquisitions
LPs: limited partners
SG&A: selling, general and administrative expenses
EV: enterprise value
EBITDA: earnings before interest, taxes, depreciation, and amortization
HSR: Hart-Scott-Rodino Antitrust Improvements Act of 1976
DOJ: Department of Justice
CDU: Germany's Christian Democratic Union party (political party)