Advisors should ride the high and invest in cannabis, expert says

investmentnews.com:

The November election is still months away but with Minnesota Gov. Tim Walz recently named as Kamala Harris’ political partner, the future of drug policy looks bright. As do the formerly “risky” investments and alternative sources of capital retention, like cannabis.

Jordan Tritt, CEO and co-founder of The Panther Group, a cannabis investment group and business advisory firm, believes now is the time for advisors to invest in the cannabis industry. For one, he highlights the sector is estimated to have sold around $40 billion in total legal sales across medical and adult use. Meanwhile, family offices have devoted on average, 45 percent of their portfolios to alternative assets in the last year.

According to fintech site, NerdWallet, the largest marijuana ETF in terms of AUM is the AdvisorShares Pure US Cannabis ETF (MSOS). The best-performing marijuana ETF by one-year performance is the Roundhill Cannabis ETF (WEED).

Tritt says there’s no reason why RIAs can’t invest in the “devil’s lettuce” as there are high risk rewards associated with it and because there’s less competition.

“Institutional investors and fiduciaries at big banks fit into lots of rules that aren’t there for independents at family offices and RIAs. They’re so risk averse that they’re not touching this space,” he says. “It creates this opportunity for people who can live in the gray area a little bit and aren’t hindered by reputational or other riskier hold backs.”

Tritt also acknowledges that the $45 million that was deployed into the sector originally was from high-net-worth individuals, but the last two years in particular has made them realize that there’s “only so many individuals that we directly know that we can source capital from.”

“If we’re