Yo, peeps! Check it out, the cannabis game is takin’ some major L’s, man. Not only are retail and cultivation operators feelin’ the burn, but even the investors in the industry are jumpin’ ship. I’m talkin’ about a big-time cannabis exchange-traded fund, fam. This fund called Poseidon Dynamic Cannabis ETF is straight up closin’ shop less than two years after it launched. Talk about a downer, right?
According to CNBC, AdvisorShares, the biggest manager of cannabis funds, just announced that this Poseidon Dynamic Cannabis ETF is gonna stop tradin’ on August 25. They’re liquidatin’ their assets and payin’ out shareholders on September 1. They made this announcement on their official website, ya heard?
The investment advisor for the AdvisorShares Trust series gave the green light for the liquidation of this fund. They had a plan in place and they’re stickin’ to it. This was all based on a recommendation from AdvisorShares Investments, LLC. So, it’s official, y’all.
Now, listen up, investors who already had shares in this fund ain’t left completely empty-handed. After September 1, they’re gonna get cash based on the net asset value of their shares as of the liquidation date. That includes any capital gains and dividends that have been accrued. And get this—they won’t have to pay no transaction fees either. It’s like a little compensation for their troubles.
But let’s talk about why this whole thing is goin’ down. See, when this fund started back in November 2021, cannabis sales were off the charts thanks to the pandemic. But now, people just ain’t as interested in investin’ in this quasi-legal cannabis sector anymore. It’s strugglin’ to grow because of low prices and the fact that the federal government ain’t makin’ any moves to legalize it. It’s like the industry is stuck in quicksand, man.
Morgan Paxhia, one of the founders of this fund, straight up admitted that they couldn’t escape the bigger economic picture. Investor sentiment has changed, especially when it comes to cannabis. Even though almost half the states in the US have legalized recreational cannabis, it’s still illegal at the federal level. That means these businesses can’t access banking services or trade across state lines. It’s a mess, dude.
And check this out, because of all these restrictions, legal cannabis businesses are strugglin’ to make any profits. Yeah, they might have big sales numbers that make headlines, but they ain’t makin’ no money. Meanwhile, the black market is thrivin’ ’cause they don’t gotta deal with all the taxes and fees. They’re the ones rakin’ in the dough while legal businesses are left in the dust.
It’s all because Washington, D.C., can’t get their act together. There’s been a bunch of failed attempts to pass cannabis reform laws, like that CAOA initiative by Chuck Schumer. And what about the SAFE Banking Act? It keeps gettin’ approved in the House but keeps gettin’ shut down in the Senate. So our hands are tied and the cannabis industry is sufferin’.
Now, Poseidon is just one casualty in this whole mess. Other cannabis equities have tanked too, man. It’s like a bad dream for investors hopin’ to make a profit off this green gold rush. In fact, another fund managed by AdvisorShares called Pure US Cannabis ETF has also taken a major hit.
So what does this mean for the future of cannabis investing? Well, it ain’t lookin’ too good right now. The industry’s facin’ a lot of challenges and roadblocks, my friends. But maybe if we push for change, if we fight for federal legalization and better regulations, we can turn this ship around. We gotta keep hustlin’, keep fightin’ for a more stable and prosperous future.
But for now, it’s a dark time for the green game. And as Poseidon Dynamic Cannabis ETF closes its doors, we gotta question whether investing in this industry is really worth it. It’s a tough call, man. But there’s always hope, right? We just gotta keep pushin’ and never give up on the dream of a thriving cannabis industry.