AdvisorShares is being accused of being a clout chaser. In November, ETF Managers Group filed a complaint against AdvisorShares for allegedly infringing on its trademark and unfairly competing against it. According to the court-filed complaint, AdvisorShares launched an ETF with a ticker symbol similar to ETFMG’s.
ETFMG launched a cannabis ETF it called MJ Alternative Harvest ETF in 2018. The ETF’s ticker symbol is “MJ” and it is one of ETFMG’s most successful funds. The fund tracks the Prime Alternative Harvest Index, which measures the success of companies legally and globally in the medicinal and recreational cannabis industries. MJ hit $1 billion within 14 months of its launch and had a high-water mark of $1.38 billion, according to court documents filed with the U.S. District Court, District of New Jersey.
ETFMG says it has used the fund’s ticker symbol in virtually every form of promotion: on its website; at sponsored events such as the UFC’s Fight Night in San Antonio, Texas, this past July; and on the fund’s webpage. So, it was bothered when AdvisorShares announced in August that it was releasing its Pure U.S. Cannabis ETF listed on the New York Stock Exchange as MJUS. The ETF will be distributed through Foreside Fund Services, a distribution and compliance provider for asset managers that ETFMG is also suing.
ETFMG sent AdvisorShares a cease-and-desist letter, according to the complaint. In response, AdvisorShares sent a letter stating that it would not. ETFMG claims that AdvisorShares has been “deliberate, willful, intentional, and in bad faith, with full knowledge and conscious disregard of EFTMG’s rights.”
ETFMG is suing for monetary compensation and wants an injunction against AdvisorShares for trademark infringement, unfairly competing against ETFMG and violating the Lanham Act as it causes confusion and mistaken identity and deceives investors.
A spokesperson for AdvisorShares said the firm does not have any comment regarding ETFMG's complaint.