Branding could be a central theme for cannabis for 2022, says portfolio manager Tim Seymour.
After a disappointing 2021 on the legislative front, the bigger players will use this year to strengthen their presence in existing cannabis markets and neighboring industries, Seymour told CNBC’s “Edge ETF” this week.
Seymour, operator Seymour Cannabis Amplifier ETF (CNBS).
Tilray CEO Irwin Simon told CNBC this week that his company will take a two-pronged approach to business while the law remains in balance: focusing on countries where the substance is located. is federally legal and trademarked in markets adjacent to marijuana.
“What do you do in the US pending legalization? You build brands and categories tied to the cannabis industry like the spirits business, like the beer business, like the food and hemp business. “, said Simon. “Closed bell.”
“Finally, one day, you’re going to see a beer out there with THC. You’re going to see a bourbon out there with THC. You’re going to see good food. And we have brands… that consumers will know.”
Seymour, who is also the founder and chief investment officer of Seymour Asset Management and a CNBC contributor, says this targeted approach will help “quarantine” publicly traded cannabis companies. against margin pressure after a difficult 2021, in which the cannabis ETF falls between 20 and 40%.
“If you think about the pricing for this sector, we’re going to be cheaper in 2022 than we were in 2021,” said Seymour. cannabis at a much lower valuation.”
It’s no surprise that Seymour’s favorite way to invest in the fast-growing space is through his actively managed exchange-traded fund, which he says offers diversification and necessary agility.
“For investors who want exposure to this day-to-day changing industry, in a working ETF strategy you have the ability to adapt quickly,” he said.
CNBS is the second best performing cannabis ETF in 2021, second only to Cambria’s Cannabis ETF (TOKE), which is roughly one-third the size.
Seymour credits its fund’s resilience in owning a global portfolio and a boom in cannabis debt market that allows companies like Green thumb industry to issue new types of debt instruments that can help protect against uncertainties in times of volatility.
