WEBVTT - Elevate Your Portfolio With Marijuana ETFs 0:00:05.559 --> 0:00:12.559 Welcome to a trillions. I'm Joel Webber and I'm Eric Belchioness. Eric, 0:00:12.640 --> 0:00:20.440 do you smoke marijuana? Not not present tense, but um, definitely. 0:00:20.440 --> 0:00:22.919 I mean I was in college in the nineties. There's 0:00:23.000 --> 0:00:27.960 a lot of interest in marijuana. Maybe you've noticed you think, yeah, 0:00:28.000 --> 0:00:31.320 I mean, it's definitely. You can just you can feel 0:00:31.320 --> 0:00:33.879 it and you can tell you smell it sometimes and 0:00:33.960 --> 0:00:36.200 other times you can't smell it because it's a vaporiser. 0:00:36.640 --> 0:00:40.120 Right in the e t F circuit quote unquote, it 0:00:40.200 --> 0:00:42.680 comes up more And is there a potty t F 0:00:43.440 --> 0:00:45.800 was one of the top things that I would be 0:00:45.800 --> 0:00:48.600 asked about, just from people internally here knowing you know 0:00:48.640 --> 0:00:50.080 that I'm et F guy, like, Hey, my wife is 0:00:50.080 --> 0:00:52.120 wondering is there a potty t F? For many for 0:00:52.159 --> 0:00:54.360 a couple of years that was a question. I got 0:00:54.400 --> 0:00:57.160 a lot and there are, yeah, more than one. And 0:00:57.440 --> 0:01:02.320 there was a big moment recently where Canada just legalize 0:01:02.360 --> 0:01:06.680 this nationally. So it's the first G seven country to 0:01:07.640 --> 0:01:12.160 legalize marijuana, recreational marijuana. Not only that, several states in 0:01:12.160 --> 0:01:15.240 the United States are doing it, and obviously there's federal issues, 0:01:15.280 --> 0:01:17.720 but you could kind of feel the cat out of 0:01:17.760 --> 0:01:20.000 the bag to a degree. And I think this A 0:01:20.000 --> 0:01:22.759 lot of people argue it's like the inpro prohibition, and 0:01:22.800 --> 0:01:25.319 I think it's a big deal. When an industry goes 0:01:25.360 --> 0:01:28.880 from no sales or nothing, or an underground market comes 0:01:28.880 --> 0:01:31.160 to the surface and now is all you know, you 0:01:31.200 --> 0:01:33.520 can capture that in terms of a new industry. So 0:01:33.640 --> 0:01:37.120 it's major. So knowing all of that, Rachel Evans, Bloomberg 0:01:37.200 --> 0:01:40.880 News reporter who we've teamed with multiple times, we asked 0:01:40.880 --> 0:01:43.839 her to go go check this out for us, and 0:01:43.920 --> 0:01:45.840 she went up to Canada did a little slew thing, 0:01:46.440 --> 0:01:50.560 And this episode is all about Rachel booting the ground, 0:01:51.120 --> 0:01:53.640 trying to figure out what's going on with marijuana ets 0:01:56.280 --> 0:02:08.840 this weekend trillions, elevating your portfolio. Hello, can I'll possibly 0:02:08.880 --> 0:02:13.520 get a coffee from you? Guys? Can I get a larteum? 0:02:13.919 --> 0:02:19.640 Can you decare for me? Double? Be good? Actually? And 0:02:19.720 --> 0:02:23.120 do you have any food at first? Next? The Cannabis 0:02:23.120 --> 0:02:26.880 and Coffee Cafe in downtown Toronto isn't the most obvious 0:02:26.960 --> 0:02:31.520 choice for a business meeting. Luridly colored bombs line the walls, 0:02:31.960 --> 0:02:35.160 and leaflets promoting the pain relieving benefits of weed dot 0:02:35.160 --> 0:02:40.040 the counter. But this is no ordinary rendezvous. I'm here 0:02:40.080 --> 0:02:44.680 to meet Christine or Hum Bloomberg's dedicated marijuana reporter for 0:02:44.720 --> 0:02:47.760 a virtual tour of the companies and products that are 0:02:47.800 --> 0:02:53.000 thriving now that Canada's legalized weed. How's again, can see 0:02:53.000 --> 0:02:59.680 you freezing? It's not too cold out it was. Unless 0:02:59.680 --> 0:03:01.880 you've been hires a kite for the last twelve months, 0:03:02.160 --> 0:03:05.519 you'll have seen, heard, or read something about this nascent industry. 0:03:06.040 --> 0:03:09.079 Potstocks jumped a whopping this year, but it's been a 0:03:09.160 --> 0:03:12.800 volatile ride, with as many lows as highs. But while 0:03:12.840 --> 0:03:15.560 you can now smoke away your losses with state endorsed weed, 0:03:16.040 --> 0:03:19.280 Toronto and the rest of Ontario won't sell it from 0:03:19.280 --> 0:03:22.720 stores of cafes until next year, much to the disappointment 0:03:22.720 --> 0:03:29.520 of my barristas, that is a beautifully depicted Cannabisly, if 0:03:29.560 --> 0:03:34.120 you guys are very clever, do you ever said? Instead, 0:03:34.240 --> 0:03:37.240 Christine and I take a scroll through a government run 0:03:37.240 --> 0:03:41.560 website called the Ontario Cannabis Store, the only place in 0:03:41.560 --> 0:03:48.240 Toronto where you can legally buy a weed. Here, anyone 0:03:48.280 --> 0:03:52.320 over nineteen can choose between Sativa or Indica strains of 0:03:52.320 --> 0:03:56.640 cannabis pre rolled joints or oils and compare prices across 0:03:56.680 --> 0:04:00.120 scores of different brands. It's about ten Canadian dollar is 0:04:00.160 --> 0:04:03.440 program roughly the amount needed for two joints, and you 0:04:03.480 --> 0:04:06.040 can buy up to thirty grams about and ounce at 0:04:06.040 --> 0:04:09.040 any one time. There are a lot of rules where 0:04:09.120 --> 0:04:12.600 the logo company's logo can't be figured that this giant 0:04:12.600 --> 0:04:15.360 THHC warning signs, so they're really and the it has 0:04:15.400 --> 0:04:18.679 to be like plain pasting they have. They're really circling 0:04:18.720 --> 0:04:21.680 like the colors and decoration they can use, so it 0:04:21.720 --> 0:04:25.240 looks very law. You're very restricted in what you can 0:04:25.279 --> 0:04:28.520 say about the products, so you can't say our marijuana 0:04:28.560 --> 0:04:31.800 will make you feel amazing, or you know this show 0:04:31.839 --> 0:04:34.800 people having a good time while smoking, and so how 0:04:34.839 --> 0:04:36.880 do you raise brand awareness? Well, for a lot of 0:04:36.880 --> 0:04:41.400 people are just reportedly coming from the black market. They 0:04:41.400 --> 0:04:43.520 know a stream that they like, they're finding in the 0:04:43.520 --> 0:04:45.479 store buying it, and they don't care what, what company 0:04:45.520 --> 0:04:49.880 or what brand is coming around. Shopping for online is 0:04:49.920 --> 0:04:54.880 a strange experience. Antique illustrations of marijuana leaves jostle with 0:04:54.960 --> 0:04:57.880 warnings about health risks, and many of the most popular 0:04:57.920 --> 0:05:01.679 products have already sold out. The breadth of the market 0:05:01.720 --> 0:05:05.120 is certainly apparent, but so is the difficulty for both 0:05:05.160 --> 0:05:09.240 smokers and investors in differentiating between a bad trip and 0:05:09.360 --> 0:05:14.240 green gold. Enter exchange traded funds, there are I think 0:05:14.279 --> 0:05:17.440 a hundred and forty or so publicly traded canabis companies, 0:05:17.600 --> 0:05:21.480 and that that will very completely narrowed down to you know, 0:05:22.160 --> 0:05:25.400 a dozen clear winners, right, so you're gonna see a 0:05:25.480 --> 0:05:28.839 lot of consolidation, and you're gonna sees bankruptcies inevitably. I 0:05:28.880 --> 0:05:31.640 think these companies are not always to survive. Rather than 0:05:31.680 --> 0:05:33.600 trying to guess who the winners and losers are going 0:05:33.640 --> 0:05:36.159 to be, to invest in a basket of stocks and 0:05:36.200 --> 0:05:37.960 just say what I'm doing is anything about on the 0:05:37.960 --> 0:05:50.240 industry as a whole. Steve Hawkins started the world's first 0:05:50.279 --> 0:05:55.400 marijuana ETF in April two seventeen. The chief executive of 0:05:55.440 --> 0:05:59.760 Horizons ETFs has always been something of a maverick, specializing 0:05:59.760 --> 0:06:02.680 in the leverage and inverse products that inspire love or hate. 0:06:03.720 --> 0:06:06.520 So the controversy around a potty t F held no fair. 0:06:07.800 --> 0:06:10.960 The deviation returns from peak to traff that we've seen 0:06:11.000 --> 0:06:16.320 on individual names is astronomical. It's just crazy, but when 0:06:16.360 --> 0:06:18.680 you own the e t F, you're owning party exposure 0:06:18.680 --> 0:06:21.680 to that party, exposure to this. It's still extremely volatile, 0:06:22.040 --> 0:06:25.600 but it's still more lead. You even keeled standard deviation 0:06:25.600 --> 0:06:29.320 of returns on a relative basis. I met Steve at 0:06:29.400 --> 0:06:32.080 his offices a few blocks from the coffee shop to 0:06:32.200 --> 0:06:35.520 learn how the Horizons Marijuana Life Sciences e t F 0:06:35.880 --> 0:06:39.480 came to life. A blog his company ran for investors 0:06:39.839 --> 0:06:43.279 kept throwing out requests for a potty TF. So in 0:06:43.320 --> 0:06:47.800 the fall of he set about making that dream reality. 0:06:48.320 --> 0:06:51.520 From the get go, it was a challenge. It was 0:06:51.560 --> 0:06:55.719 a very new precedent for me in you know, having 0:06:55.839 --> 0:07:01.560 launched you know, fifty six products over the past five years. Uh, 0:07:01.720 --> 0:07:05.120 this was something completely different we've never seen before. Did 0:07:05.160 --> 0:07:07.000 anyone think you were a little bit nuts when you 0:07:07.040 --> 0:07:08.599 kind of came to them with this and said, you 0:07:08.640 --> 0:07:12.960 know what, we want to put marijuana stocks in an? Absolutely? Absolutely, 0:07:13.080 --> 0:07:17.280 And that's why it was. It was extremely sensitive subject matter. 0:07:17.680 --> 0:07:21.000 There's such a negative stigma at that point in time 0:07:21.040 --> 0:07:24.520 that was still associated with marijuana. Even with the development 0:07:25.040 --> 0:07:30.640 an approval of medical marijuana and how integrated into Canadians lifestyle, 0:07:30.720 --> 0:07:33.920 it was becoming you know, it was there was a 0:07:33.960 --> 0:07:36.679 lot of silence on the other end of the phone 0:07:36.680 --> 0:07:39.080 lines when when you asked the question, and it's like 0:07:39.440 --> 0:07:41.080 all you could hear in the in the background was 0:07:41.120 --> 0:07:43.960 the wheels clicking and people thinking, really you want to 0:07:44.000 --> 0:07:47.360 do this? Wow, that's not something that we have traditionally 0:07:47.440 --> 0:07:50.480 ever done. And you know, we went through, you know, 0:07:50.640 --> 0:07:54.280 several layers of beer cratic approval at every single third 0:07:54.280 --> 0:07:56.320 party service provider we went to, like, you know, it 0:07:56.360 --> 0:07:59.360 didn't just stop at the partner or if it really 0:07:59.360 --> 0:08:01.040 had to get escalate it to their boss and then 0:08:01.080 --> 0:08:06.040 their boss. Eventually he persuaded an index custodian and market 0:08:06.040 --> 0:08:09.640 maker to get on board, but Steve still needed buy 0:08:09.640 --> 0:08:13.200 in from the Toronto Stock Exchange. The exchange had listed 0:08:13.200 --> 0:08:16.520 a handful of cannabis companies, but anyt F of those 0:08:16.520 --> 0:08:19.360 companies still made it squirm. Even once we've got all 0:08:19.400 --> 0:08:22.840 the third party service providers lined up and the index 0:08:22.880 --> 0:08:25.880 providers done, and we have figured out how we're going 0:08:25.920 --> 0:08:28.040 to launch this and how we're going to management, then 0:08:28.200 --> 0:08:30.960 I had to go through a very long process of 0:08:31.000 --> 0:08:33.920 approval with the t SEX. Normally, with the t SEX, 0:08:34.000 --> 0:08:37.720 it's pretty much switch and it's here's the information, here's 0:08:37.720 --> 0:08:40.880 our application, here's our filing fee. Thank you, Steve, We've 0:08:40.880 --> 0:08:44.320 got all the documentation switches on. It was a many 0:08:44.360 --> 0:08:47.840 week process and dealing with the exchange their lawyers and 0:08:47.920 --> 0:08:52.840 our lawyers. Numerous conference calls, numerous discussions. There was a 0:08:52.920 --> 0:08:59.000 whole negotiation procure, but it was worth it. After eight months, 0:08:59.040 --> 0:09:02.680 Steve's fund, which goes by the ticker h M m J, 0:09:03.559 --> 0:09:06.360 launched a wave of publicity. I didn't want to be second. 0:09:06.679 --> 0:09:09.040 I wanted to be the world's first, and we did 0:09:09.080 --> 0:09:11.839 accomplish that. In hindsight, we probably could have waited to 0:09:11.920 --> 0:09:16.360 four twenty or something like that, but you know, we 0:09:16.360 --> 0:09:19.079 were We felt we were in competition with a group 0:09:19.080 --> 0:09:21.319 in the US that was trying to launch a similar 0:09:21.360 --> 0:09:24.280 product um and from a time in perspective, if I 0:09:24.320 --> 0:09:28.400 had approval, I wanted to go. That fear didn't materialize. 0:09:28.760 --> 0:09:32.640 In the US, cannabis remains illegal under federal law, and 0:09:32.720 --> 0:09:35.200 want to be issuers of pop funds have struggled to 0:09:35.240 --> 0:09:39.720 convince federally regulated companies like banks to supply back office 0:09:39.760 --> 0:09:51.040 support Jeff's sessions. The U s Attorney General is stepping down, 0:09:51.120 --> 0:09:54.000 apparently at the request of President Trump. This is a 0:09:54.080 --> 0:09:57.240 huge moment for the cannabis industry. You might remember earlier 0:09:57.280 --> 0:10:01.400 this year, back in February yourself, u acceptions laid down 0:10:01.440 --> 0:10:04.480 the gauntlet on the cannabis industry. Uh he. With the 0:10:04.480 --> 0:10:08.240 Attorney General Jeff Sessions now ousted, the cannabis industry has 0:10:08.280 --> 0:10:11.720 outlasted one of its most vocal foes, but the Trump 0:10:11.760 --> 0:10:16.200 administration probably won't budge overnight. Consequently, while there are a 0:10:16.200 --> 0:10:19.320 handful of pot tyts in Canada, the US has just one, 0:10:20.280 --> 0:10:23.400 The e t f MG Alternative Harvest TTF, which goes 0:10:23.440 --> 0:10:26.640 by the ticket MJ started life as a Latin American 0:10:26.679 --> 0:10:29.800 real estate fund, side stepping the startup challenges that to 0:10:29.880 --> 0:10:33.480 plague the ambitions of others. It's it's very unfortunate for 0:10:34.120 --> 0:10:38.040 the US cannabis industry that the government really hasn't been 0:10:38.040 --> 0:10:40.480 able to see the writing on the law as we 0:10:40.559 --> 0:10:44.400 have in Canada, and Canada was the first G seven 0:10:44.440 --> 0:10:46.920 country to go recreational approved, and I think there will 0:10:46.960 --> 0:10:50.400 be more to follow long before the US. Right now, 0:10:50.520 --> 0:10:52.800 we have the ability to go outside of Canada to 0:10:52.880 --> 0:10:57.520 put boots on the ground operations, to export product into 0:10:57.559 --> 0:11:01.079 these companies or countries on a worldwide basis. So we're 0:11:01.200 --> 0:11:04.880 creating a globalization of the cannabis industry. And it's interesting 0:11:04.880 --> 0:11:07.680 that it's Canada that's driving it, not the US, and 0:11:07.720 --> 0:11:12.240 we have a significant competitive advantage over the Americans. Right now, 0:11:12.280 --> 0:11:15.320 we've got our footh hall, but the winds of change 0:11:15.360 --> 0:11:20.040 may be blowing. More than six of Americans support legalization, 0:11:20.600 --> 0:11:23.400 and more and more states are putting medical and even 0:11:23.440 --> 0:11:27.640 recreational use on the ballot. Some estimate that the U 0:11:27.760 --> 0:11:32.600 s pot market could grow to billion, and the global 0:11:32.679 --> 0:11:35.600 market could eventually be worth a hundred and fifty billion. 0:11:39.640 --> 0:11:42.760 But for others, the pots stock craze is just that, 0:11:43.280 --> 0:11:46.719 a craze that won't last long. That's the thinking of 0:11:46.800 --> 0:11:50.000 Jared Dillion, who ran the ETF desk at Lehman Brothers 0:11:50.040 --> 0:11:53.199 in two thousand and eight. Now editor of the Daily 0:11:53.280 --> 0:11:56.760 Dirt napp and market newsletter, He's seen his fair share 0:11:56.760 --> 0:11:59.960 of bubbles and thinks the pot industry's potential is limited. 0:12:00.400 --> 0:12:04.800 Even in the US. Culturally, we have already reached peak 0:12:04.880 --> 0:12:12.720 acceptance of marijuana um even though it's not completely legal. 0:12:12.880 --> 0:12:17.520 This is the highs and acceptance. The projections are understandable, 0:12:17.720 --> 0:12:21.880 you know, given how optimistic people are about how widespread 0:12:21.960 --> 0:12:25.200 or pervasive use of this stuff could get. People like 0:12:25.280 --> 0:12:27.679 the dream big in certain trades, and this is a 0:12:27.720 --> 0:12:31.320 trade where you can dream big. But the problem is 0:12:31.440 --> 0:12:36.800 is that the stocks basically priced in all that growth 0:12:36.920 --> 0:12:42.040 almost immediately. Valuations are certainly looking to the future. Till Ray, 0:12:42.240 --> 0:12:44.760 which was worth fifteen billion dollars at the height of 0:12:44.800 --> 0:12:48.000 the potstock rally, has only about ten million dollars in 0:12:48.080 --> 0:12:52.080 revenue last quarter. Steve Can sees that there's a lack 0:12:52.120 --> 0:12:54.839 of hard data, but it's bullish on the market over 0:12:54.840 --> 0:12:58.920 the long term. This is an extremely rumor mill driven industry. 0:12:58.960 --> 0:13:00.880 There's no doubt of it. I've never seen anything like 0:13:00.960 --> 0:13:03.600 it from history. You know, you can have every stock 0:13:03.640 --> 0:13:06.120 down and then there's a little rumor about coke and 0:13:06.160 --> 0:13:08.160 such and such are Pepsi and such and such are 0:13:08.480 --> 0:13:10.960 Molson Coors and such and such, and that company stock 0:13:11.040 --> 0:13:15.199 is up in literally five minutes, and and that has 0:13:15.240 --> 0:13:17.920 a waterfall effect to all the companies in the industry. 0:13:18.400 --> 0:13:21.240 You know, the industry is still new. There's still isn't 0:13:21.240 --> 0:13:25.199 a lot of known quantitative facts with respect to how 0:13:25.240 --> 0:13:27.720 big the industry is going to grow from here. With 0:13:27.800 --> 0:13:31.120 the recreational approval, and it will be very very interesting 0:13:31.240 --> 0:13:35.280 to see where this company stands when these cannabis companies 0:13:35.320 --> 0:13:39.520 have to do all their financial regulatory reporting and we 0:13:39.559 --> 0:13:43.800 actually start to see hard financial results that you get 0:13:43.840 --> 0:13:47.400 introduced by the analysts on the street and um, and 0:13:47.520 --> 0:13:52.240 what these companies are you know, actually producing so um. 0:13:52.280 --> 0:13:54.600 If you want to invest in this space, it's not 0:13:54.640 --> 0:13:56.839 for the faint of heart. You need to check the 0:13:56.880 --> 0:13:59.320 batteries and your pacemaker and you have to look at 0:13:59.320 --> 0:14:09.120 it from my perspect give as a long term investment. Okay, 0:14:09.120 --> 0:14:11.680 so let's come down off that high. Rachel, thanks for 0:14:11.720 --> 0:14:14.040 doing this trip to Canada for us. Thanks for having 0:14:14.040 --> 0:14:17.720 me again. So what have you learned about this space 0:14:18.200 --> 0:14:21.280 both through the reporting for this podcast and also leading 0:14:21.360 --> 0:14:23.920 up to it. I think what I really took away 0:14:23.920 --> 0:14:25.920 from this it is kind of like what potential and 0:14:26.000 --> 0:14:29.560 yet also how hard it is to actually estimate how 0:14:29.600 --> 0:14:32.080 big that potential is going to be. It's like reality 0:14:32.200 --> 0:14:35.640 versus potential exactly, and that's everybody's trading off the potential 0:14:35.680 --> 0:14:37.680 at the moment, and that's why you're seeing where you saw, 0:14:37.760 --> 0:14:40.520 I guess this huge potstock rally earlier in the year, 0:14:40.840 --> 0:14:43.120 but talking to kind of some people around the industry, 0:14:43.240 --> 0:14:46.360 it really depends on how that translates into actual sales 0:14:46.400 --> 0:14:49.160 of weed now that weed is legal in Canada, and 0:14:49.200 --> 0:14:52.240 how that translates into revenue. I thought was really interesting 0:14:52.240 --> 0:14:55.720 stat that I mentioned the report Tilray had a market 0:14:55.760 --> 0:14:59.120 capitalization of fifteen billion at its peak, but it's revenue 0:14:59.200 --> 0:15:01.640 last quarter was only ten million. I mean that shows 0:15:01.640 --> 0:15:03.560 you kind of like how much these things have been 0:15:03.600 --> 0:15:06.520 inflated in terms of their valuation, and we won't actually 0:15:06.560 --> 0:15:09.560 start to see kind of like financial reporting until next year. 0:15:09.720 --> 0:15:11.240 That's when we're going to start to really see that 0:15:11.280 --> 0:15:13.160 the rubber hit the road, as it were, and see 0:15:13.200 --> 0:15:16.200 whether some of these valuations really hold up. I have 0:15:16.240 --> 0:15:17.760 a question for you, Well, one thing I thought was 0:15:17.800 --> 0:15:21.840 interesting was you said this caught pain relieving benefits, And 0:15:21.920 --> 0:15:24.840 to me, this is one of these big points because 0:15:25.040 --> 0:15:28.200 if this can be put forth as a substitute for 0:15:28.240 --> 0:15:32.040 the for opioids, which is a huge problem here, it 0:15:32.040 --> 0:15:34.120 almost feels like you can maybe win over even the 0:15:34.160 --> 0:15:36.480 most conservative people that would did that come up a lot? 0:15:36.560 --> 0:15:38.600 Is that a big point? I mean, this was the 0:15:39.000 --> 0:15:41.160 topic of the leaflets in the cafe. I went to 0:15:41.240 --> 0:15:44.000 CBD um. This is kind of like the property within 0:15:44.120 --> 0:15:46.440 cannabis that allows you to kind of like ease away 0:15:46.520 --> 0:15:48.960 some of those pains. And yeah, the opioid point really 0:15:48.960 --> 0:15:51.160 did come up. I was chatting with one of the baristas, 0:15:51.160 --> 0:15:53.320 a guy called Joe, and he was telling me that 0:15:53.360 --> 0:15:55.480 he used to be addicted to opioids. He had some 0:15:55.560 --> 0:15:56.960 after he had I think it was a car crash, 0:15:57.000 --> 0:15:59.040 he said, And he was addicted to opioids for about 0:15:59.080 --> 0:16:02.240 five to seven years. Is then he started smoking marijuana. 0:16:02.280 --> 0:16:04.400 And as he said, it wasn't so much a gateway drug, 0:16:04.480 --> 0:16:06.320 is an exit drug for him. That allowed him to 0:16:06.320 --> 0:16:09.800 come off the hard arapioids. That's powerful because that will 0:16:09.840 --> 0:16:11.520 win over the people who just look at it as 0:16:11.560 --> 0:16:16.440 a good time. Still not legal in the US everywhere, 0:16:16.600 --> 0:16:19.320 I mean certain places, right, but you can still invest. 0:16:19.400 --> 0:16:22.640 It is legal to invest. A great ticker here, m J, right, 0:16:23.520 --> 0:16:25.080 so MJ is the one in the US. Let me 0:16:25.080 --> 0:16:27.240 give you a few caveats here. First of all, the 0:16:27.280 --> 0:16:32.000 way MJ happened was a little unusual. It was a 0:16:32.040 --> 0:16:34.360 ticker called Layer, which was a Latin America real estate 0:16:34.760 --> 0:16:36.440 and it was from a white label issuer who I 0:16:36.480 --> 0:16:39.360 guess had ultimate power and decided, we don't like what 0:16:39.520 --> 0:16:42.440 Layers doing. It doesn't make money. Let's just switch it 0:16:42.480 --> 0:16:44.840 over the strategy, the name, and the ticker, everything, and 0:16:44.840 --> 0:16:46.720 we'll make it a potty t F. And I think 0:16:46.720 --> 0:16:49.320 it was last December, you just woke up, and I 0:16:49.320 --> 0:16:53.240 think it was after Christmas. American Now I owned marijuana 0:16:53.320 --> 0:16:55.800 the good nobody really owned Layers, So there probably was 0:16:55.880 --> 0:16:58.720 maybe the guy's family weren't was in it maybe at best. 0:16:59.240 --> 0:17:01.960 And then MJ immediately I think it got a couple 0:17:02.080 --> 0:17:04.399 hundred million right off the bat. There was definitely it 0:17:04.400 --> 0:17:09.000 tapped into to some demand. Now there's since then, Uh, 0:17:09.040 --> 0:17:12.879 there's issue with the company's custodian. This company is also 0:17:13.560 --> 0:17:17.679 dealing with a lawsuit multiple I think, and this company 0:17:17.680 --> 0:17:19.960 has always kind of got this sort of cloud over it, 0:17:19.960 --> 0:17:25.720 and I just think that's important to know here with yeah, um, 0:17:25.800 --> 0:17:28.840 but you know, at this time, MJ is a ticker, 0:17:28.960 --> 0:17:32.240 it trades, it tracks the index, although we actually looked 0:17:32.240 --> 0:17:34.800 at MJ and it does trail the index by about 0:17:34.880 --> 0:17:38.520 ten percent over the past year. The reason is is 0:17:38.560 --> 0:17:41.600 because their custodian wasn't letting them do securities lendings. So 0:17:41.640 --> 0:17:44.040 it wasn't able to make any money back, and til 0:17:44.119 --> 0:17:45.879 Ray was so hard to buy when they tried to 0:17:45.920 --> 0:17:48.879 rebalance into it that they were the index doesn't have 0:17:48.920 --> 0:17:51.400 to actually buy stocks, and it's like lives in a vacuum. 0:17:51.640 --> 0:17:53.320 The e t F was unable to buy until Ray 0:17:53.359 --> 0:17:56.359 fast enough to match the index, so it lags a 0:17:56.359 --> 0:17:58.840 little bit. But those are just some caveats to know, 0:17:59.520 --> 0:18:03.360 but it because it's the only one, UH, people overlook 0:18:03.359 --> 0:18:05.800 almost all that. One thing interesting to kind of like 0:18:05.840 --> 0:18:07.680 just chime in on that is with h mm J, 0:18:07.960 --> 0:18:10.240 that the one in Canada. I got talking to see 0:18:10.320 --> 0:18:12.480 a bit about who owns that, and it was really 0:18:12.480 --> 0:18:15.840 interesting to me. I think he said, like sevent is 0:18:15.880 --> 0:18:18.760 owned by Canadians, but the other thirty percent is owned 0:18:18.760 --> 0:18:21.040 by non Canadians. They get some of that data through 0:18:21.040 --> 0:18:23.800 their transfer agent because they have to report it in Canada, 0:18:24.000 --> 0:18:25.760 which I thought was fascinating. He said that they've seen 0:18:25.760 --> 0:18:29.840 buyers from the UK, from Israel, from Asia, so there's 0:18:29.880 --> 0:18:33.200 clearly interest in buying h MMJ, not just within Canada, 0:18:33.240 --> 0:18:36.640 but actually externally as well. UM, and you know hm 0:18:36.800 --> 0:18:38.480 m J, the one in Canada that was the first 0:18:38.600 --> 0:18:41.160 to market in the world, Um. What was interesting about 0:18:41.200 --> 0:18:44.440 that one is it came out and obviously I think 0:18:44.440 --> 0:18:46.440 it got I don't know, I want to say, five 0:18:47.119 --> 0:18:50.280 million dollars pretty quickly, and then it fell. Um it 0:18:50.320 --> 0:18:52.040 came out after a long run in part, but then 0:18:52.080 --> 0:18:54.320 after the e t F came out, it dropped. And 0:18:54.480 --> 0:18:57.040 normally when a new e t F comes out, especially 0:18:57.040 --> 0:18:59.920 a high flyer goes down, people leave, they don't stick around. 0:19:00.520 --> 0:19:03.719 But nobody left. The assets stuck stuck there, and it's 0:19:03.800 --> 0:19:08.800 highly unusual. That's why pot investors maybe the best investors. 0:19:08.800 --> 0:19:12.240 If you're an issuer, they either forgot or again. They're 0:19:12.240 --> 0:19:14.439 tapping into people who believe in the story for the 0:19:14.480 --> 0:19:17.120 long term. And I think that that's just an interesting 0:19:17.200 --> 0:19:19.400 data point about h M m J. And that's something 0:19:19.440 --> 0:19:21.760 that that Steve brought up of horizons as well. I mean, 0:19:21.800 --> 0:19:23.720 he was saying that, you know, this is a very 0:19:23.800 --> 0:19:27.159 volatile play. If you're going into potstocks, even in an 0:19:27.160 --> 0:19:29.080 e t F form, you need to be very well 0:19:29.119 --> 0:19:31.840 aware that you could go very far down as well 0:19:31.920 --> 0:19:34.560 as very high. So you need to be thinking about 0:19:34.560 --> 0:19:36.000 that when you invest in his His thing is you 0:19:36.200 --> 0:19:37.959 check your pacemaker. If there's got to be in there 0:19:38.040 --> 0:19:40.200 for the long hall. Right on that note, in terms 0:19:40.240 --> 0:19:42.720 of hanging there during volatility, I thought what Christine said 0:19:42.720 --> 0:19:46.119 the reporter from Canada that a hundred and forty publicly 0:19:46.160 --> 0:19:48.840 traded cannabis names will be narrowed down to a dozen. 0:19:49.400 --> 0:19:53.080 Consolidation that E t F isn't is could be really 0:19:53.359 --> 0:19:55.720 helped out by M and A, especially if you see 0:19:55.720 --> 0:19:58.800 that kind of consolidation UM from especially these big tobacco 0:19:58.840 --> 0:20:01.840 companies start buying up these small pot stocks. Um, that 0:20:01.920 --> 0:20:04.600 was a good point. What will that look like? Uh 0:20:04.640 --> 0:20:06.480 in the e t F. Then as that starts to 0:20:06.520 --> 0:20:09.560 happen as an allist, how do you look at that? Well, 0:20:09.920 --> 0:20:12.119 when you have these small ETFs like um, that a 0:20:12.200 --> 0:20:14.679 stock could go up fifty in a day, you have 0:20:14.720 --> 0:20:17.760 no way knowing that targets are the ones that benefit, right, 0:20:17.840 --> 0:20:20.520 So uh, we would see a big bump in the 0:20:20.520 --> 0:20:24.080 e t F. Although diversification helps you obviously in downturns, 0:20:24.080 --> 0:20:25.800 but it also limits your up so you wouldn't feel 0:20:25.800 --> 0:20:27.680 all that fifty percent. You might feel like might lift 0:20:27.680 --> 0:20:29.320 the e t F like six percent, but that's a 0:20:29.880 --> 0:20:32.320 that's better than not and that's the thing I mean. 0:20:32.359 --> 0:20:34.560 Christine also mentioned that you know, there there will be 0:20:34.600 --> 0:20:36.240 some people out there that will be the you know, 0:20:36.280 --> 0:20:38.320 the equivalent of the Apple investors. Oh, I was there 0:20:38.320 --> 0:20:40.520 in the beginning. I owned Apple, But you know, and 0:20:40.560 --> 0:20:42.640 people will be doing that with certain pot stocks. But 0:20:42.680 --> 0:20:44.640 if you want to take a long term play on 0:20:44.720 --> 0:20:47.280 pots and you don't know which of the companies out 0:20:47.280 --> 0:20:49.600 there are going to be targets or acquirers, then you 0:20:49.680 --> 0:20:51.280 might as well think about this from a kind of 0:20:51.320 --> 0:20:54.439 broad diversification sector. I mean, that's what an ETF does, right. 0:20:54.760 --> 0:20:57.800 What I liked about this was the physical nature of it, 0:20:58.520 --> 0:21:00.400 and I sometimes think a part in bit point they've 0:21:00.400 --> 0:21:02.719 always been linked to, like you know, stuff that's been 0:21:02.720 --> 0:21:05.520 a craze in the last five years. But bitcoin, you 0:21:05.640 --> 0:21:08.720 there's no stores, you can't touch it. It's not usually 0:21:08.760 --> 0:21:12.320 as currency. Here you went to stores, there's there's people 0:21:12.359 --> 0:21:15.800 working there, you can buy it. Did did did it 0:21:15.920 --> 0:21:20.120 change for use? Like actually seeing it literally there physically. 0:21:20.200 --> 0:21:21.800 I Mean the thing in Ontario is is that it's 0:21:21.880 --> 0:21:24.160 kind of like in transitionary phase, right. I Mean, you've 0:21:24.200 --> 0:21:26.960 still the only place you can legally buy weed is 0:21:27.000 --> 0:21:29.679 online in Ontario, So that's kind of strange. Let's go 0:21:29.720 --> 0:21:32.840 through a government website, and by part like it feels 0:21:32.840 --> 0:21:35.920 sort of, you know, like you're stepping over a boundary there. 0:21:36.200 --> 0:21:38.240 But I mean you could still buy it from dispensaries 0:21:38.240 --> 0:21:40.280 that were on the streets that were selling it illegally. 0:21:40.359 --> 0:21:42.119 I think they are cracking down on that because now 0:21:42.200 --> 0:21:44.800 obviously we'd equals tax dollars, so that's something they want 0:21:44.800 --> 0:21:46.240 to kind of push out. But I thought it was 0:21:46.280 --> 0:21:48.480 really interesting. I mean that the coffee shop I went 0:21:48.480 --> 0:21:51.399 to was called Cannabis and Coffee. People are ready for 0:21:51.560 --> 0:21:54.320 when weed is available to be sold as edibles and 0:21:54.359 --> 0:21:57.120 coffee shops, and they want to have a dispensary also 0:21:57.160 --> 0:21:59.800 in in that coffee shop upstairs. Then you can actually 0:21:59.800 --> 0:22:01.520 buy you know, how to paper bag and take it 0:22:01.560 --> 0:22:05.040 home with you. As as it stands, now, you can 0:22:05.080 --> 0:22:09.080 buy specific e t F s that are in this sector. Right. 0:22:09.200 --> 0:22:14.360 I'm also interested in will will these stocks or aspects 0:22:14.359 --> 0:22:17.240