We don't release a product unless it's absolutely perfect. Our THC levels are going up against any craft guy. We're about to announce a couple of big new brands and new drops, all focused on very high quality on both the terp and THC side. We've got a few tricks up our sleeves coming down the line. You guys remember I used to talk about this technology Curaleaf was working on called ACE? It is now in full swing. You're going to see an incredible launch of a revolutionary vape product which is cleaner than any vape product in the market. We're launching in New York, Mass, and Florida — three locations.
Is that an extension of the brick line, or is it a new — is it an extension of the brick line?
We eventually want to put it in brick, but our 2.0 brick is going to come out mid-year. The viscosity in this product is high, so the current brick can't handle it. We're doing it through the 510 — that's how it gets launched. However, in June when brick 2.0 comes out, we will be able to inject this new product, which I'm not going to name yet, into it. Very similarly to what distillate did — now, I may be talking about stuff. I don't know if you guys were in the market 10, 15 years ago, but if you remember Open when it came out with the first vapes, it was a very thick, brown color, right? And then in California, Select was part of that. By the way, in Oregon there were a couple of guys that came out with the CO2 distillate product, and it was yellow, it was clear, and that just took over the market. It was cleaner and became the benchmark. So what we've done now is the next level of product — an absolutely clear product. It's a white-based oil, but more importantly it has no solvents in it, it's clean. You can take as big of a hit — I've tried it many times — you will never cough. It's got no negative effect on your lungs. It's truly an unbelievable product. Last week I was in Fort Lauderdale to see Anthony, and I head over to Hard Rock for the college football games and then I was at the Panthers game. I must have talked to, I'm not kidding, 50 people, and I would say 90% voted in favor for Amendment Three in Florida. And it is what it is, obviously.
Well, you were at Hard Rock — yeah, true, you weren't in Tallahassee in your cowboy boots and your cowboy hat. Also, Broward County — Broward County was one of the only counties that carried over the 60% threshold for the vote on Election night.
Listen, there were two things that happened in Florida. One is a lot of Democrats didn't come out to vote because we're now such a red state. Nobody thought the Democrats had any chance on anything, and that hurt us — the turnout was much lower amongst Democrats. The second issue is DeSantis ran a very effective — albeit he lied through the whole thing — but a very effective anti-cannabis campaign. He used taxpayer funds and he used a lot of them. I can tell you right now, I think if you reran it — like what happened in Arizona, remember we lost the first time in Arizona and got it the second time around because we were able to breach the 60%. It's the only other state that had the same issue as Florida. I think if you ran Florida today, we'd reach the 60%.
Yeah, I think you have a point. When you look at the federal level and the state level, there's broken telephone going on within the government on what's going on with this overall space right now. And what we heard a month ago at MJBiz is a lot of the bigger MSO companies are really getting aggressive with the right messaging and the right lobbying on behalf of the industry. Is that something you're approaching and preparing for here in 2025, given what happened in Florida?
Look, it's moment of truth time for this industry when you think of 2025. I can't announce certain things, but I can tell you this: this industry, at least the top five, have never been closer. We talk on a regular basis. We've put our differences aside, we've put our egos aside. We are in full coordination mode, and I can tell you there's going to be some big money put up to get both SAFE and this done. We all realize it's make or break in the next two years for this industry, and we have to get this to happen. Everyone, including the ones that never cooperated with us, are in. Everyone's in. And the real dollars — if you don't have a $50 million PAC, you can't do anything in DC. So I can tell you we're going to be in good shape from that. No guarantees, but at least we're now coordinated, we're talking to each other on a regular basis, and we've put our differences aside. We all know we need to do this to save the industry.
Well, we've been talking for 33 minutes now, and outside of what you've outlined for the company, I think that's the big takeaway that everybody should have from today's interview. That's very promising, and I think a lot of people want to hear that moving forward. It's great to know that the top companies have never been closer and are working with each other. So anyway, listen, happy New Year. Are you a Jets or Giants fan?
See you later, doing much better.
Yeah, they killed their number one pick, but anyways, I think I might have to retire as a Jets fan because it's been way too goddamn long. It's like cannabis, but even worse.
Yeah, I hear you. Sony just wrote, 'I'm 35 years old, I feel like I've been investing in this space for over a hundred years.' I think there's a lot of people that can relate to that.
Listen, tell Camilo nobody got more money as an individual than me in this market. So trust me, I'm with everyone else.
Boris, listen, honestly, best of luck. There's a lot of people rooting for you and the top MSOs, really hoping you guys can do whatever you can do. It's great to know a lot of work's got to be done, but you guys are prepared to do that, and it's great to hear you're all working with each other. So best of luck, keep in touch.
Okay, thank you guys for everything you guys do. It's great.
All right, thanks Boris, appreciate it. Thanks Boris. Well, that to me was the big takeaway. Good for him, man. CEO getting his fingerprints on everything. He was saying before we went live that he's getting everybody back to the office right now. Let's face it, remote work — sometimes you can pick up some bad habits. But if there's anyone determined to be number one, he's the guy to be reckoned with because his track record speaks for itself. Wasn't that great to know? Curious to see what happens in Florida — I'm going to see it in real time, so we shall see.
Yeah, I'm — well, I don't know, man. I was very happy to hear that, kind of like what we were hearing — some things in Vegas last month about these top MSOs working very closely with each other. But I mean, that's all you could hope for right now. I don't want to be casting dispersions on anybody, but yes, when there's an existential threat to the industry — which is if reform doesn't happen in the next two years, I would consider that an existential threat — they damn well better come together. They're a bunch of smart individuals. They finally realize they need to get in unison, they need to unify the messaging, they need to put their money where their mouth is and get this industry on track. Because they're all influential individuals, and it is critical if we don't get something done.
Well, from one big story to another big story, as we segue into ETF news. And with that, let's welcome in a good friend of the podcast, Mr. Dan Ahrens. Good to see you, how are things?
Hey guys. How are things — that's kind of a tough question. We saw today and everything else, but we're hanging in there. Happy to be on with you guys to educate a little bit about the inner workings of ETFs again, because there's news.
Yeah, well, based off of that news this morning, I don't want to ask like were you surprised or anything like that, but does this have any kind of impact on the broader landscape of ETFs in the space? How are you handling this?
Well, it has impact on the broader space because I think there was a huge misunderstanding about the news. And I think for today's red, anyway, I think it was caused by that news.
Yeah, back up a step — what was the news, Dan, just so we can set the record straight exactly for the people that don't know?
So, a press release this morning out of Amplify ETFs. Everybody needs to know that about a year ago, Amplify acquired the fund MJ and MJUS and a handful of other funds from a company called ETF Managers Group that no longer exists. Now, another interesting thing at Amplify is they also have the small competitor fund, ticker symbol CNBS, that's run by Tim Seymour, who's a good guy. It's a small fund. So under the Amplify umbrella they have MJ, MJUS, and CNBS. But Tim's fund CNBS had always been a little bit at arm's length from the other ones. So they announced this morning that at approximately January 20th, they're going to close and liquidate the fund. Now, before I go fully in depth on that, it's standard practice. You have to give the exchange a certain number of days, you have to make a public announcement. The very standard wording is that they're going to close and liquidate, and leading up to that date the fund may stray from its investment objective as it moves to cash. When you just spit out a document like that — and hey, AdvisorShares has 17 funds currently, over the history of the firm we've opened and closed plenty of funds — it's very standard wording. Close and liquidate. Then I'll go on to explain how it's no big deal and a lot of people are misunderstanding it.
So with the liquidation, is that as black and white as it sounds? They are going to be forced to liquidate those assets into the open market. Are they allowed to do off-market deals like block trades, company buyback programs — not saying any specific names — but can they massage the way they liquidate the fund, or are they basically forced to go open market sell and get rid of everything?
All they have to do is get that thing down to cash for investors that hold till the end. Now, I'm going to explain this because in this case it actually makes perfect sense, and I can't blame them a bit for closing down the fund. So everybody needs to listen up. Some people can sell right now if they're a shareholder and want to get out while the getting's good — just do a trade, but then you're subject to whatever the bid-ask is, put a limit order, do whatever you want. If you stay all the way till the end, you got no transaction costs, no bid-ask, you're going to get what the NAV is — net asset value — on that closing day. But here in black and white is why we are of the opinion — just opinion — that this is no big deal. If you look at the assets, and people might want to write down with pen and paper to keep the fund name straight: MJUS has about 69 million in assets. We try to be very public when people are comparing funds. It has 69 million in assets. When you look at the affiliated fund MJ — MJ's been around a real long time — I think it has around 150 million in assets. Its top holding is MJUS.
Can you repeat that? Can you repeat that again — the top holding of MJ? Like the same strategy as YOLO?
Yeah, it's like a competitor to our fund YOLO, and they actually kind of copied a strategy that we use. YOLO existed before MSOS did. And YOLO was the very first fund to go out and get the legal opinions and the New York Stock Exchange exemptions and everything else we needed to invest in total return swaps in US companies. And for — I think everybody knows this listening, but custody banks, New York Stock Exchange listings, we can't invest directly in a company like Curaleaf or Cresco or the others. We use a total return swap that mimics owning the stock. So YOLO used to do that. After we invented the fund MSOS, we thought, hey, that's a pain in the neck to use all these total return swaps in YOLO. In MSOS, let's just have our fund YOLO hold shares of MSOS. Let's waive the fees so we're not double-dipping any funds. So YOLO's global strategy, as you said, Anthony, gets its US MSO exposure by holding the fund MSOS. The MJ folks came out and copied that strategy. So MJ's top holding is MJUS. And if you look at the holdings, it's on their website every day, it holds about $65 million worth. So the entire fund MJUS is 69 million, 65 of it is held by MJ. There's hardly any investors in this thing — it's about 4 million bucks.
So how does MJ liquidate its holdings in MJUS without crashing the vehicle? Wouldn't MJ have to come off the MJUS paper?
So there's one of two things that are going to happen here. People might want to go back and look at the Twitter sphere — for those that are not on X, I compliment them, it's probably easier on your psyche. Noah Hammond was out with a couple tweets this morning, I sent out a couple, we're trying to explain this. Let's back up a little bit. Tim Seymour is involved in the fund CNBS, also at Amplify. They did a filing in November to say they were going to add a sub-advisor. They're keeping Tim on as some kind of advisor or portfolio manager, but they added a layer to it. They also said they're changing the investment strategy to be 100% US. So one of two things is going to happen, in our opinion — again, opinions here. MJ is not just going to get rid of its US exposure. It has about 65 million of US companies. It also holds Tilray and Aurora and Canopy and all that other stuff. But I think they're going to do one of two things: they're going to close and liquidate MJUS and give those assets to CNBS, or they're going to close and liquidate MJUS and MJ is just going to hold the swaps itself. Now, you can go a little deeper under the hood. Again, I don't know what the relationship is with Tim, how they pay him. Tim's a good guy. There's no reason MJ can't hold the swaps themselves. We do the same thing with YOLO — we just thought it'd be easier for the global strategy to get US exposure through the MSOS fund. But these guys at Amplify — it's expensive to have a fund open. MJUS only has about 4 million bucks of what I would call organic assets. Almost all of its assets are because MJ invests in it. So if you look at the holdings of MJUS, yes, it has Curaleaf and Trulieve and Cresco and all the others, but it also has MAPS, IIPR, some other stocks, a bunch of T-bills. Oh no, those T-bills, Anthony, are just collateral for the swaps. They do it in T-bills, we do it in interest-bearing accounts with Bank of New York and money market sweep vehicles.
I mean, what was the most jarring thing was to wake up this morning and see the press release. And everyone has PTSD from when MJUS does the rebalancing and wreaks havoc all over the sector. That's what everybody saw, and everyone was like, 'Oh [__].' Let's hope this isn't going to be a cascading effect.
