A proposed constitutional amendment for recreational marijuana is under review by the Florida Supreme Court.

Brad Horrigan | Tribune News Service | Getty Images

A leading exchange-traded fund in the cannabis sector will be shuttered as investors lose interest in the legally restricted industry.

The largest cannabis fund manager, AdvisorShares said Poseidon Dynamic Cannabis ETF August 25 will be the last day of trading. The fund will liquidate assets and make payments to shareholders on Sept. 1, according to a notice on the fund’s website.

Led by brother-sister founders Emily and Morgan Paxhea, the fund was slated to launch on the New York Stock Exchange in November 2021. Pandemic-era cannabis sales boom,

The shutdown comes as investors have lost interest in the semi-legal cannabis industry which is largely struggling. Wholesale prices have come down, and Congress has also come down Federal laws not reformed Due to which the growth of the sector has been hampered.

In an emailed statement to CNBC, co-founder Morgan Paxia said the fund was “not immune to the broader macro-economic environment and, in particular, the dramatic shift in investor sentiment that has affected the cannabis industry.”

Whereas Nearly half of US states have legalized the recreational use of cannabis By adults, it remains illegal at the federal level. Its classification as a Schedule I substance, along with heroin and LSD, has barred the sector from accessing most banking services and trading across state lines, leading to cannabis gluts in many states and plummeting prices.

The fall in equity values ​​has driven investors away from the industry and capital has been drained.

Poseidon Investment Management, which started in 2013 as one of the first cannabis-focused hedge funds in the US, Since its inception, its ETF has seen its value decline by about 74%, compared to a 1.7% decline in the S&P 500.

Its value has fallen 65% in the past year and traded below $1 on Tuesday. During this, Pure US Cannabis ETFAnother fund in the industry, by AdvisorShares, fell nearly 60% during the same period.

Poseidon is the latest casualty in an industry strained by market forces and economic policy.

Last month, a $2 billion merger between cannabis multistate operators Cresco Labs and Columbia Care fades More than a year after the companies announced the acquisition. Mastercard, in a move further alienating the cannabis industry from big banking, announced last month that it would stop allowing cannabis transactions on its debit cards in compliance with federal law.

Leave a Reply

Your email address will not be published. Required fields are marked *