Three US-Listed ETFs Remain in the Cannabis Market
After a tumultuous few years, the cannabis ETF market has consolidated around three primary vehicles. These ETFs, AdvisorShares Pure US Cannabis ETF (MSOS), AdvisorShares Pure Cannabis ETF (YOLO), and Amplify Seymour Cannabis ETF (CNBS), have shown significant rebounds over the past year, despite severe long-term losses. Here’s a breakdown of each ETF and what sets them apart.
MSOS: A Synthetic Exposure to US Multi-State Operators
MSOS is the first US-listed ETF to focus specifically on American multi-state operators. Due to federal law restrictions, the ETF uses total return swaps to gain synthetic exposure to these operators. The portfolio is concentrated on large US MSOs, with Curaleaf Holdings as its largest holding. The sector composition reflects the corporate structures of the underlying operators, with Real Estate, Industrials, and Consumer Cyclical sectors dominating.
YOLO: A Global Cannabis Sleeve
YOLO is a globally diversified ETF that holds a mix of US MSOs, Canadian licensed producers, and ancillary names. It provides a more diversified exposure to the cannabis industry, spreading the risk across jurisdictions. The sector weightings reflect the underlying companies’ classifications, with Health Care and Consumer Defensive sectors dominating.
CNBS: An Actively Managed Cannabis Book
CNBS is an actively managed ETF that targets companies engaged in cannabis and hemp-related activities. It was launched in 2019 and is managed by Tim Seymour. The fund mixes US MSOs, Canadian LPs, and ancillary or biotech names, with Curaleaf Holdings as a top-weighted position. The active management angle allows Seymour to adjust weightings among MSOs, ancillary services, and biotech names as the regulatory picture shifts.
Choosing Among the Survivors
Each ETF has its unique characteristics, and investors must weigh the pros and cons before making a decision. MSOS offers a concentrated read on US multi-state operators and a clean expression of a domestic reform thesis. YOLO provides a more diversified exposure to the cannabis industry, while CNBS takes a different route with its actively managed, swap-based structure. The one-year returns across the group reflect a sector stabilizing after a prolonged drawdown, and the five-year figures reflect the cost of the shakeout to holders who owned through the peak.
