AdvisorShares Pure Cannabis ETF (YOLO) Covered Calls

AdvisorShares Pure Cannabis ETF is an actively managed exchange-traded fund that invests in both domestic and foreign cannabis-related companies. The fund seeks long-term capital appreciation by targeting businesses involved in the cultivation, production, and distribution of cannabis and hemp. It also invests in companies providing support services, such as real estate, financing, and laboratory testing, to the legal cannabis industry.

You can sell covered calls on AdvisorShares Pure Cannabis ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for YOLO (prices last updated Fri 4:16 PM ET):

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AdvisorShares Pure Cannabis ETF (YOLO) was the first actively managed ETF domiciled in the United States with a dedicated cannabis investment mandate. The fund is designed to provide pure-play exposure to the global cannabis marketplace, navigating the complex regulatory landscape of this emerging sector. Its portfolio includes equity securities of companies across various market capitalizations that derive a significant portion of their revenue from the legal cannabis business.

The fund employs a flexible investment strategy, allowing its management team to adjust exposure between U.S. and international markets as legal and commercial conditions evolve. While it invests in direct plant-touching businesses where federally legal, it also utilizes total return swaps to gain exposure to U.S. Multi-State Operators (MSOs) that trade on Canadian exchanges. This structural approach allows the fund to capture the growth of the U.S. domestic market while maintaining its listing on a major U.S. exchange.

Core Strategy and Portfolio Holdings

The portfolio is diversified across several sub-sectors, including pharmaceuticals, biotechnology, and specialized REITs that lease property to cannabis growers. Key holdings often include major Canadian licensed producers and leading U.S. MSOs. By investing in ancillary companies—those that provide the lighting, packaging, and technology used in cannabis production—the fund aims to reduce the volatility associated with raw commodity price swings in the cannabis flower market.

As an actively managed fund, the portfolio manager can tactically overweight certain regions or sectors based on legislative progress, such as federal decriminalization efforts or changes in state-level medical and recreational laws. This active oversight is intended to identify "growth leaders" that possess strong balance sheets and the operational scale necessary to thrive in a highly competitive and taxed environment.

Competitive Landscape

1. AdvisorShares Pure US Cannabis ETF is the company’s sister fund and the primary competitor for investors specifically seeking 100% U.S. exposure. It is highly liquid and widely used for options trading in the cannabis sector.
2. Amplify Alternative Harvest ETF is the largest and oldest cannabis ETF. It tracks a broad index of global cannabis companies and tobacco-related firms, providing a more passive, index-based alternative to YOLO’s active management.
3. Amplify Seymour Cannabis ETF is another actively managed fund led by industry experts. It competes by offering a curated portfolio of global cannabis and hemp stocks with a similar focus on rigorous fundamental analysis.
4. Global X Cannabis ETF (POTX) follows a market-cap-weighted index of companies active in the legal cannabis industry. It competes for investors looking for low-cost, systematic exposure to the sector’s largest players.
5. Roundhill Cannabis ETF (WEED) is a targeted vehicle that focuses on the highest-conviction names in the U.S. and Canadian markets. It competes by offering a more concentrated portfolio compared to the broader reach of the YOLO ETF.

Strategic Outlook and Innovation

The fund’s long-term outlook is closely tied to the global trend of cannabis legalization and the increasing medical acceptance of cannabinoids. The management team focuses on identifying companies that can successfully transition from the "early-stage growth" phase to "operational maturity." This involves a focus on cash-flow positive operators and those with defensible intellectual property in the pharmaceutical and consumer packaged goods (CPG) spaces.

Innovation within the fund includes the strategic use of derivatives and income-generating strategies to manage risk and potentially enhance returns during periods of consolidation. As the U.S. moves closer to potential federal legislative shifts, such as the SAFER Banking Act, the fund is positioned to adjust its holdings to capture the resulting institutional capital inflows. By providing a professionally managed gateway to a complex industry, the fund aims to serve as a core thematic holding for growth-oriented investors.

Want more examples? YMAX Covered Calls | YORW Covered Calls