Benzinga Cannabis Hour Recap: Tim Seymour Discusses 2021 Trends, Cannabis ETFs

The cannabis industry has grown exponentially over the last year. Moreover, the shift in political preferences toward cannabis legalization is evident more than ever, now that Democrats are holding the gavels.

Still, there's anxiety among investors, says ETF manager Tim Seymour (see video below).

Considering that the incoming Democratic government is serious about cannabis reform, investors can expect "legislation that's cannabis-friendly in the context of markets and re-rating," Seymour says.

Seymour, who manages the Amplify Seymour Cannabis ETF, says many investors are wondering whether they are well-positioned and whether the companies they invest in will survive and “be the players that they were yesterday tomorrow?"

"Leadership is coming from profitability," he says, citing the U.S. multi-state operators (MSOs) that run the industry over the last year.

"Some serious management teams are coming in a time when the landscape in terms of legislation is very bullish," he adds.

"It gets a lot more complicated from here," he stated, adding that it's "what we expected."

See the full interview in a special edition of Benzinga Cannabis Hour below:

Federal Legalization

There are three types of legislation on the federal level that are vital for cannabis to become an appropriate part of the commercial world, Seymour says.

The dynamics around the More Act are "more complex, longer-dated to take full place on a federal level," adding that "the shorter term dynamics around States Act are ones that really can address 280e tax dynamics."

Moreover, he suggests that allowing safe banking in the commercial sense as well as for companies to raise capital the way other companies do, is something cannabis businesses can expect in the near term.

"There's an ability to carve out and have a safe harbor for banking as it relates to Investment Banking Capital raised and possibly exchange listings," he noted, adding that that would be "more powerful in terms of valuations for companies and multiple re-rating.”

Look To Tomorrow, Not Yesterday

Seymour's Amplify Seymour Cannabis ETF, or CNBS, is an actively managed portfolio.

"By definition, 80% of the portfolio has to be in companies that derive more than 50% of the revenues from cannabis," he explains. "We're investing in companies both in Canada and the U.S. that are in the cannabis sector today."

Investors have to understand in which direction capital flows are going to go, Seymour advises, highlighting that they "loaded up on some defensive names that actually were portfolio stabilizers."

What he cares about: the trade for tomorrow and not what happened yesterday.

The most exciting thing about the industry's current state is that we're merely "scratching the surface of the institutional interest," he says.

The Benzinga Cannabis Hour is produced every week and brings together top executives, entrepreneurs, and experts from all corners of the cannabis industry. Each show features three or more guests from a broad spectrum of expertise in cannabis.

To tune in, stream the episode below; click subscribe on the official Benzinga YouTube channel; or visit BZCannabisHour.com.

Cannabis Hour is also published on most major podcasting platforms, including Spotify, Google Podcasts, Breaker, Pocket Casts, and more.