Weed ETF waives fee ahead of much-awaited drug relabeling

Weed ETF waives fee ahead of much-awaited drug relabeling
The sector-focused fund will sport a zero percent expense ratio for a limited time as regulators move to reclassify the substance.
JUL 01, 2024
By  Bloomberg

Roundhill Investments is completely waiving the fee for its $5.6 million cannabis fund as US regulators move to reclassify marijuana as a less dangerous substance.

Starting Monday, the actively managed Roundhill Cannabis ETF (ticker WEED) is dropping its expense ratio to zero from 40 basis points for at least one year, according to a filing submitted to the US Securities and Exchange Commission last week. 

“With the likely upcoming reclassification of cannabis to a Schedule III drug potentially serving as a catalyst for the space, Roundhill is offering this fee waiver for the WEED ETF to make investing in cannabis more accessible,” said David Mazza, Roundhill’s chief executive officer. 

The Department of Justice in May had formally started the procedure of shifting marijuana’s legal status to Schedule III, less dangerous, from Schedule I, most dangerous, a move that’s been backed by President Joe Biden. 

WEED has lost 58% since its April 20, 2022 inception — a date celebrated among cannabis aficionados every year — but has notched a nearly 5% gain year to date.

Still, the dozen exchange-traded funds linked to cannabis and psychedelics tracked by Bloomberg Intelligence have seen 17 consecutive monthly inflows, with investors plowing $393 million into them this year alone. The largest in the group is the $889 million AdvisorShares Pure US Cannabis ETF (MSOS), launched in September 2020, which has an expense ratio of 74 basis points.

The long-awaited step toward potential acceptance of marijuana is widely viewed as a victory for the industry, with many anticipating significant benefits, from reduced civil and criminal penalties to tax advantages. No decision has been made yet and reclassifying cannabis will not decriminalize it. 

Latest News

Citigroup continues strategic investment banking talent raid on JPMorgan
Citigroup continues strategic investment banking talent raid on JPMorgan

Since Vis Raghavan took over the reins last year, several have jumped ship.

Slow is smooth, smooth is fast
Slow is smooth, smooth is fast

Chasing productivity is one thing, but when you're cutting corners, missing details, and making mistakes, it's time to take a step back.

Edward Jones layoffs about to hit employees, home office staff
Edward Jones layoffs about to hit employees, home office staff

It is not clear how many employees will be affected, but none of the private partnership's 20,000 financial advisors will see their jobs at risk.

CFP Board hails record July exam turnout with 3,214 test-takers
CFP Board hails record July exam turnout with 3,214 test-takers

The historic summer sitting saw a roughly two-thirds pass rate, with most CFP hopefuls falling in the under-40 age group.

Founder of water vending machine company, portfolio manager, charged in $275M Ponzi scheme
Founder of water vending machine company, portfolio manager, charged in $275M Ponzi scheme

"The greed and deception of this Ponzi scheme has resulted in the same way they have throughout history," said Daniel Brubaker, U.S. Postal Inspection Service inspector in charge.

SPONSORED Delivering family office services critical to advisor success

Stan Gregor, Chairman & CEO of Summit Financial Holdings, explores how RIAs can meet growing demand for family office-style services among mass affluent clients through tax-first planning, technology, and collaboration—positioning firms for long-term success

SPONSORED Passing on more than wealth: why purpose should be part of every estate plan

Chris Vizzi, Co-Founder & Partner of South Coast Investment Advisors, LLC, shares how 2025 estate tax changes—$13.99M per person—offer more than tax savings. Learn how to pass on purpose, values, and vision to unite generations and give wealth lasting meaning