Cannabis Stocks Soar as Trump Expected to Ease Federal Restrictions
The cannabis industry is poised for significant growth as US President Donald Trump is expected to sign an executive order reclassifying marijuana from a Schedule I substance to Schedule III under the federal Controlled Substances Act. This move would bring cannabis companies under different tax regulations, making it more attractive to institutional investors. The reclassification could also pave the way for additional medical research and access to traditional banking services.
Industry experts believe that the executive order is a foregone conclusion, and its implementation could mark the beginning of a new era in public health policy. The move would dismantle outdated drug policies that have been in place for nearly a century and are no longer aligned with scientific and medical advancements.
As a result, cannabis stocks have seen a significant surge, with some ETFs experiencing gains of over 35%. Five ETFs to watch in this space include the AdvisorShares Pure US Cannabis ETF (MSOS), Roundhill Cannabis ETF (WEED), Amplify Seymour Cannabis ETF (CNBS), Amplify Alternative Harvest ETF (MJ), and the AdvisorShares Pure Cannabis ETF (YOLO).
YOLO has seen the highest year-to-date performance, but all five ETFs have outpaced the broader S&P 500 index with an average return of 43%. The cannabis industry has already been experiencing a resurgence, and this latest news is expected to sustain the existing rally into next year.
Thematic ETFs, including those focused on cannabis, are best reserved as satellite positions in investors’ portfolios. They offer a way to amplify growth in niche areas and can complement existing large-cap growth equity holdings.
For more information on thematic investing and cannabis ETFs, visit the Thematic Investing Content Hub.
