VIDEO — Fund Manager: Bright Future for Cannabis Not Reflected by Stocks
Dan Ahrens of AdvisorShares Investments gives his thoughts on volatility in the cannabis market after a recent Washington vote on legalization.
A fund advisor isn’t surprised at recent volatility in the cannabis space after a vote in the US House of Representatives raised hopes about the possibility of federal reform for the drug.
The Investing News Network (INN) sat down with Dan Ahrens, managing director and chief operating officer at AdvisorShares Investments and manager of two cannabis exchange-traded funds (ETFs), to discuss recent events.
He also gave his views on what the roadmap for US policy reform could look like, and why he continues to be frustrated at basic misunderstandings when it comes to cannabis operators.
MORE Act shows support for cannabis reform, but expected to stall at Senate
Last Friday (April 1), the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act cleared the House for the second time. In the lead-up, cannabis stocks faced another period of hype followed by deflating momentum.
Ahrens explained that this volatile period was expected based on ongoing misunderstandings in the market.
He said he agrees with the consensus that, in its current form, the legislation has no chance of clearing the Senate. However, the expert explained why he thinks the progress of this bill may be different this time.
“There’s a lot more support for some type of federal reform for cannabis really coming from both sides of the aisle, more than at any point in the past,” Ahrens said.
Instead of sweeping federal legalization, Ahrens expects to see incremental changes by way of compromise through other bills. Chief on his wish list is the ability to change the banking rules affecting multi-state operators in the US. “Right now, cannabis companies can’t do banking in the US,” he said.
These rules also prevent the biggest operators from listing on major US exchanges, and from securing financing and building business relationships with big-name investment banks.
The cannabis expert preached a long-term outlook when it comes to the industry. For him, immediate double-digit gains are no longer available based on pure hype.
“Be patient, be very patient and have a long-term focus,” Ahrens said.
Watch the interview above to hear the rest of Ahrens’ thoughts, including his recap of the year so far for US cannabis stocks, and why he thinks investors keep trading Canadian names based on news that only affects the US.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Bryan is a Senior Editor with INN. After graduating from the Langara journalism program he did some freelance reporting with community newspapers in British Columbia. He initially wrote about the life science space for INN and now spends his time covering the marijuana market, from Canadian LPs to US-based companies, and the impact of this sector on investors.
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