You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.
Friends,
AdvisorShares Pure US Cannabis ETF (NYSE Arca: MSOS) has plunged to an all-time low and is down 33.9% year-to-date to just $2.52 The performance thus far in 2025 has been worse than the NCV Global Cannabis Stock Index, which is down 23.9%, and the NCV American Cannabis Operators Index, which is down 28.6%. The “actively-managed” ETF has no index, which is kind of odd, but clearly MSOS is performing very poorly this year. In fact, MSOS has been performing very poorly since inception, as it is down tremendously since then:
I have been pretty negative for quite some time on MSOS, though I did become more favorably inclined due to the very large drop since the elections in November. This was a mistake! Even here, in a newsletter article, I suggested that MSOS could bounce. I shared an article on Seeking Alpha this past weekend discussing how much it is down, but I concluded that MSOS could keep dropping.
MSOS closed on Friday at $2.62, and it closed yesterday at $2.51 with a low during the day of $2.40, its all-time low. I am extremely concerned about the ETF’s exposure to its three largest constituents, which currently represent 66.5% of the portfolio. This is down from 67.5% on Friday, as each of the stocks have fallen this week. These MSOs, in order of size, are Green Thumb Industries (OTC: GTBIF), Trulieve (OTC: TCNNF) and Curaleaf (OTC: CURLF). I do not include any of these in my model portfolio at 420 Investor, and I shared why GTBIF is at risk of a decline in a newsletter in February.
MSOS has seen its share-count rise by 4.8% in 2025 due to inflows. It has added to its Curaleaf position by 8.7% and its Trulieve position by 0.7%, and it has cut its GTI exposure by 9.9%. Perhaps I need to take away my criticism of the fund for not being actively managed!
Having 2/3 of an ETF exposed to the 3 largest MSOs by revenue and market cap is silly, and investors should not stick around to watch this play out. For those who like the idea of owning so much CURLF, GTBIF or TCNNF, they can just buy those stocks and save the fee. For those who like MSOs but must by an ETF, I think that Amplify Seymour Cannabis ETF (NYSE Arca: CNBS) makes more sense. I discussed a major change in this ETF in January, and the fund has gotten larger since then. It currently has a high exposure to these three MSOs, but their 35.2% level is substantially lower than MSOS’s.
As I have shared frequently, there is more to the cannabis market than just MSOs. At 420 Investor, I hold just two in my model portfolio, and my exposure relative to the index I aim to beat is very similar. I am underweight ancillary companies and very overweight Canadian LPs currently. In both of these sub-sectors, investors can find stocks with less risk than the MSOs seem to face. If 280E does not go away, then things could get a lot worse for the MSOs, and the ETF MSOS could see further declines. MSOS should be removed from investor portfolios.
Sincerely,
Alan
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:
Exclusives
Canadian Cannabis Sales Sank in January
Cannabis Financial Reports Showed Challenges Again
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