Dan Ahrens - Investing in Cannabis: The Next Great Investment Opportunity

Dan Ahrens

Copyright 2021 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993, or fax (317) 572-4002.

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Library of Congress Cataloging-in-Publication Data

Names: Ahrens, Dan, author.

Title: Investing in cannabis : the next great investment opportunity / Dan Ahrens.

Description: First edition. | Hoboken, New Jersey : John Wiley & Sons, Inc., [2021] | Includes index.

Identifiers: LCCN 2020034694 (print) | LCCN 2020034695 (ebook) | ISBN 9781119691013 (hardback) | ISBN 9781119691006 (adobe pdf) | ISBN 9781119690993 (epub)

Subjects: LCSH: Marijuana industry. | Cannabis--Economic aspects. | Marijuana--Economic aspects. | Investments.

Classification: LCC HD9019.M38 A47 2021 (print) | LCC HD9019.M38 (ebook) | DDC 338.4/763379--dc23

LC record available at https://lccn.loc.gov/2020034694

LC ebook record available at https://lccn.loc.gov/2020034695

Cover Design: Paul McCarthy

Cover Art: Getty Images | Lalita Chaudhari / Eyeem

he opinions expressed in this book are those of the author alone, not the publisher, and not necessarily those of AdvisorShares Investments, LLC, AdvisorShares Trust, the AdvisorShares Pure Cannabis ETF (NYSE: YOLO), or the AdvisorShares Pure US Cannabis ETF (NYSE: MSOS). Opinions are subject to change, are not guaranteed, and should not be considered a recommendation to buy or sell any security or AdvisorShares Fund. There are risks involved in investing in evolving industries that may be adversely affected by legislative initiatives as well as changes in social and economic conditions, all of which may impact the profitability of companies.

book about investing in cannabis was not even possible just a few short years ago. There wasn't enough to invest in! Publicly traded and exchange-listed cannabis stocks have exploded onto the scene with legalization in Canada and a constantly growing list of locations in the United States. Cannabis includes both medical and recreational adult-use marijuana, but also hemp-based CBD (cannabidiol) and other cannabinoids with a long list of potential uses. Pharmaceutical and biotech companies are just scratching the surface of cannabis-based applications. Marijuana dispensaries are quickly opening all around the United States, Canada, and in countries across the globe. Cannabis based products are everywhere lotions, oils, beverages, food wellness products of all types for humans and for pets.

This book will focus of investing in cannabis through publicly traded stocks that are available to everyone. The opportunity is substantial. The new business of cannabis will have great success stories but will also have abysmal failures. As a new industry, the ups and downs will be extreme. A lot of companies won't make it. Some may be downright fraudulent. We will discuss the state of legalization and name the top cannabis operators in the United States and Canada, in biotech and pharmaceuticals, CBD, and all the other associated businesses. I'll tell you what to look for, and what to avoid.

his book and our cannabis funds would not have been possible without contributions from a great number of people. I would like to thank AdvisorShares CEO Noah Hamman for his ideas and for his drive to get the first cannabis focused, actively managed, exchange-traded fund launched in the United States. And to everyone else at AdvisorShares, thanks for all you do. Managing Director of Distribution James Carl helped with some great data and charts. Thanks to Lynn Brautigan and Mackenzie Peterson in our marketing department for all their constant work on content. Lynn created some nice-looking charts for the book. Investment Consultant Lance Davidson keep up the great communications. Thanks to our Chief Compliance Officer Stefanie Little. And thank you to Ryan Graham, a Vice President at JConnelly PR, for your good work with the press.

For the launch of my firm's cannabis-related funds, a great many people at partner firms and servicing firms were involved. There are too many to name but include people at trading firms, swap dealers, market makers, authorized participants, legal firms, tax and audit, and of course the fund distributor, fund administrator, and the stock exchange.

All of the people in various groups at Bank of New York Mellon and BNY Mellon Asset Servicing for Exchange Traded Funds have been great to work with. We've been fund clients of BNY Mellon for more than 10 years and brainstormed with them about cannabis stocks for well over a year before launching our fund. I appreciate their understanding of what's legal and what's not, and how to handle our cannabis investments properly.

The Exchange Traded Products team at the New York Stock Exchange have been great partners and helped us launch dozens of funds quickly and efficiently. They've also helped us get some great ticker symbols.

Our outside counsel at Morgan, Lewis & Bockius LLP have represented AdvisorShares since our founding and always aided us in being an innovative fund company. They are the best in the business of exchange-traded funds.