By Natan Ponieman and Javier Hasse.

In this four-part series, Benzinga takes an exclusive look at some of the highest valued, US-traded cannabis ETFs.

For our fourth and last installment, we spoke with Tim Seymour, director and founder of The Amplify Seymour Cannabis ETF (NYSE:CNBS).

The Amplify Seymour Cannabis ETF (NYSE:CNBS) launched on the New York Stock Exchange in July 2019. It’s an actively-managed ETF led by Seymour, who is CIO of Seymour Asset Management firm, and Senior Advisor to the JWAM Growth (Cannabis) Fund.

“In my ETF we have a clear set of guardrails requirements we have to follow for investability,” says Seymour. “We are a cannabis specific ETF and we are named as such and labeled as such. So we have to have a particular concentration of cannabis names in the portfolio. And those names have to have a particular concentration of their revenues be cannabis.”

Per the ETF’s rules, at least 80% of the names in the portfolio must be cannabis-dedicated companies. Companies must also have at least 50% of their revenue coming from cannabis. That leaves out tobacco, beverage and pharma companies that may have high stakes in the sector, but are not cannabis-specific.

“The other guideline is that we're a US-listed and regulated ETF, which means that we have to comply to Standard 40 act criteria," Seymour says.

When it comes to strategy, Amplify is an actively-managed ETF. That means that it’s not tied to an index. 

“We are free to trade day in and day out, every day," he said. "That doesn't mean we do it. But if there are catalysts to investing in companies or divesting in companies for that matter, we're able to act on those quite quickly."

It’s crucial to have the ability to evolve with the sector and act with speed if a company starts to show some concerning signals, he explained.

For Seymour, Investing in cannabis stocks now is really about bottom up investing and “understanding those operators who have good assets, who are great operators and who have proper balance sheets to get through a difficult period in capital markets.”

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

Original publication in 2020.

Lee en español: Gerentes Explican sus ETF de Cannabis: CNBS