The U.S. cannabis industry is experiencing a surge of optimism as regulatory changes loom on the horizon, and AdvisorShares, a prominent provider of cannabis-focused Exchange-Traded Funds (ETFs), is bullish about the future. Managing over $1 billion in assets, AdvisorShares’ ETFs offer investors exposure to the dynamic U.S. multi-state operators (MSOs) market, a sector that has navigated a turbulent path in recent years.
“Cannabis continues to gain mainstream acceptance,” said Dan Ahrens, managing director at AdvisorShares. “And we believe elections and reforms are setting the stage for growth.”
AdvisorShares offers three investment funds: the flagship ETF, MSOS, focuses on U.S. cannabis companies, while MSOX, designed for more experienced traders, provides leveraged exposure. YOLO blends U.S. cannabis exposure with global equities.
One of the key changes on the horizon is the potential rescheduling of cannabis from Schedule I to Schedule III. This move would significantly reduce tax burdens for U.S. cannabis operators, paving the way for greater profitability and growth.
Furthermore, the momentum for cannabis legalization continues to gather steam. Over 92% of the more than 43,000 public comments submitted during the DEA hearing process supported rescheduling.
The upcoming elections are expected to further accelerate the market’s trajectory. State ballot initiatives, particularly in Florida, Nebraska, and North Dakota, are poised to drive significant growth. Florida, where medical marijuana sales exceed $2 billion, could legalize adult-use cannabis, potentially expanding the market to $5 billion annually.
The positive sentiment surrounding regulatory changes has already had a tangible impact on MSOS performance. The MSOS ETF witnessed a sharp increase on Tuesday, closing at $7.68 after an 8.17% gain. The stock’s break above both the 8-day and 20-day simple moving averages signals strong upward momentum. The MACD shows positive movement, while the RSI, nearing overbought territory, suggests the potential for a short-term pullback.
However, other indicators, such as Bollinger Bands, suggest that MSOS is trading near the upper band, indicating increased volatility. While bullish indicators remain strong, investors should be prepared for possible consolidation in the short term.
The cannabis industry is poised for significant growth, driven by evolving regulations and increasing public support. As the industry matures and investors continue to seek opportunities in this burgeoning sector, ETFs like MSOS are likely to play a crucial role in shaping the future of cannabis finance.
