The second investment fund comes to the Brazilian market and is seeing cannabis as a promising segment. The manager Vitreo launches the fund Cannabidiol Light less than a month after presenting the first Brazilian fund to invest in the cannabis industry. The Vitreo Cannabidiol FIA IE, launched in October. The main difference between them is the size of the international market.
The second cannabis fund from Vitreo hopes to attract small investors.
Launched in October, the Vitreo Cannabidiol FIA IE Fund invests 100% of its assets in the U.S. and Canadian financial markets.
Additionally, it will invest two-thirds of its portfolio in ETFs (Exchange Traded Funds) and one-third in five years’ shares of six companies in the cannabis sector.
You can find more on cannabis funds and other cannabis investing news in the Hemp.im app.
More information about the Vitreo fund
The Vitreo fund is totally focused on the foreign market. The CVM (Brazilian Securities and Exchange Commission) imposes restrictions on access only to qualified investors, i.e. those with at least $237, 000 (R$1 million in financial investments).
Currently, only 15% of Vitreo’s clients declared to have the profile of qualified investors. With the launch of the Cannabidiol Light fund, Vitreo expands the access to the cannabis market for small investors.
This fund will invest 20% of the capital in the Vitreo Cannabidiol FIA IE fund, composed of shares and ETFs, and 80% in the Selic Treasury, a fixed-income security considered the safest available in the country.
The administration fee is 0.056% and the minimum investment is $1, 200 (R$5, 000). The great demand for the fund restricted to qualified investors gave Vitreo a little push to decide to popularize cannabis investments.
In the first 12 hours after the launch of Vitreo Cannabidiol FIA IE, the manager raised more than $711, 000 (R$3 million) and reached $5 million (R$20 million) in the first two weeks.
The manager’s goal for Brazil’s first two cannabis funds is to reach $23 million (R$100 million) in assets in each of them.
The shares of cannabis companies are highly volatile, not only because of the traditional variations in supply and demand, as is the case with any variable income asset but also because of risks specific to this segment, such as those associated with government bans.
It is worth noting that although these companies are not state-owned, they are at the mercy of eventual changes in the composition of governments and regulations of the sector.
The manager of Vitreo says that, at the moment, 22 countries already have some free use of cannabidiol, which represents a total population of more than 1.5 billion people.
Risks in the second cannabis fund
Even when outsourcing asset management, Vitreo’s specialists advise its clients to understand at least some of the sectors in which the second cannabis fund applies so that they understand the risks and opportunities involved.
“It’s very important that investors understand the risks of that investment, whether on the equity side, in a sector with high potential growth, or on the foreign exchange exposure side. It is important that investors analyze this based on their investor profile and investment horizon,” said George Wachsmann, partner and head of management at Vitreo.
Is investing in cannabis a crime?
There are no legal grounds to sue an investor for investing in shares of marijuana producing companies abroad or in funds that invest in these companies.
Even so, in the opinion of lawyers and federal attorneys heard by Valor Invest, the principles of autonomy and discretion that govern the actions of public prosecutors and judges mean that there is a chance that the investor will be the target of an investigation or a criminal action, even if in the end these procedures result in acquittals.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Hemp.im, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Valorinveste, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Hemp.im assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Hemp.im is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.