MSOS ETF Climbs +18% in 30 Days as Regulatory Tailwinds Support Cannabis Operators

Key Takeaways

• MSOS gained roughly 18% over the trailing 30 days, rebounding from about $4.21 to approximately $4.97.
• The advance follows a volatile three-month stretch in which the fund peaked near $5.75 in early June before sliding to roughly $4.01 in late July.
• Regulatory catalysts—led by the move of state-licensed medical cannabis to Schedule III and the removal of IRS Section 280E tax penalties—remain the dominant drivers of ETF performance.
• The portfolio is concentrated in the largest U.S. multi-state operators (MSOs), including Curaleaf Holdings, Trulieve Cannabis, and Green Thumb Industries.
• Because most plant-touching U.S. operators cannot list directly on major exchanges, MSOS gains much of its exposure through total-return swaps, adding structural and counterparty considerations.

MSOS ETF Overview and Its Focus on U.S. Cannabis Operators

The AdvisorShares Pure US Cannabis ETF (MSOS) is an actively managed, non-diversified exchange-traded fund that seeks long-term capital appreciation. The fund invests at least 80% of its net assets in securities of companies deriving at least half of their net revenue from the U.S. marijuana and hemp business, as well as in derivatives with similar economic characteristics. Launched in September 2020, MSOS is structured as a thematic vehicle focused specifically on domestic, plant-touching cannabis operators rather than on Canadian licensed producers.

The fund holds roughly 112 positions and manages approximately $850 million in assets under management (AUM). Its largest exposures are concentrated among the biggest U.S. MSOs, including Curaleaf Holdings, Trulieve Cannabis, Green Thumb Industries, Glass House Brands, Verano Holdings, TerrAscend, and Cresco Labs. The net expense ratio is approximately 0.78%. Because U.S. exchanges have historically restricted direct listings of plant-touching cannabis businesses, MSOS obtains a significant share of its exposure through total-return swaps with institutional counterparties, which is why a large portion of the portfolio is held in cash and short-term Treasury collateral.

This concentrated, swap-based structure explains much of the fund's recent behavior. When regulatory sentiment improves, the handful of large MSOs that dominate the portfolio can move sharply, amplifying both the upside and the downside of the overall vehicle. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.

MSOS Price Performance Over the Last 30 Days and Quarter

Over the trailing 30-day period, MSOS advanced approximately 18%, rising from a close near $4.21 to roughly $4.97. The move was not a straight line: the fund consolidated through much of early-to-mid August before a renewed leg higher in late August carried it toward the $5.00 level.

The broader quarterly picture is more mixed. Over the trailing three months, the ETF is modestly lower—down roughly 1.6% from around $5.05—because an early-June rally that briefly pushed the fund above $5.75 gave way to a steep pullback that bottomed near $4.01 in late July. The result is a volatile, V-shaped pattern in which the recent 30-day rebound has largely recovered the ground lost during the summer drawdown but has not yet fully retraced the June highs.

Factors Behind the Recent 30-Day Advance in MSOS

The recent advance was driven primarily by continued progress on U.S. cannabis regulation. In the spring, federal action moved state-licensed medical marijuana to Schedule III, eliminating the IRS Section 280E penalty that had prevented licensed operators from deducting ordinary business expenses such as payroll, rent, and interest. That change directly improved the earnings and free cash flow (FCF) outlook for the large MSOs that anchor the MSOS portfolio.

Sentiment was further supported by the NYSE listing of Trulieve Cannabis (TRLV), one of the fund's largest holdings, which was widely seen as a signal that U.S. exchanges are opening to previously restricted operators. Ongoing Drug Enforcement Administration (DEA) proceedings examining whether adult-use cannabis could also be rescheduled kept investor attention on the sector, while quarterly earnings from major holdings gave investors a clearer view of improving operating leverage under the new tax regime. The combination of tax relief, exchange access, and expectation of further reform supported renewed accumulation in the fund.

Performance Drivers Over the Trailing Quarter

Over the trailing quarter, MSOS's trajectory reflected the tension between a powerful regulatory catalyst and profit-taking in a high-beta, sentiment-driven sector. The strong rally into early June was fueled by the Schedule III announcement and the anticipation of exchange uplistings. As the initial catalyst passed, the fund gave back gains through June and July in a classic "sell the news" pattern, compounded by the sector's historically elevated volatility.

Longer-term, the quarter highlighted a structural shift rather than a simple trading move. The removal of 280E tax penalties represents a durable change to the profitability calculus of U.S. cannabis operators, and institutional ETF flows and positioning reflected a gradual re-rating of the sector from a speculative trade toward a fundamentally improving earnings story. The recovery in August and early September suggests investors have begun to look past short-term headline noise toward the cumulative effect of tax relief, banking access, and potential broader rescheduling.

Key Developments to Monitor for MSOS Going Forward

The most important variable for MSOS remains the federal regulatory timeline. Investors should monitor the outcome of DEA proceedings on adult-use rescheduling, any movement on banking reform, and the pace at which operators translate tax relief into reported profitability and free cash flow. The 280E removal is already improving cash generation for medical-focused operators; whether adult-use markets receive the same treatment will shape the next leg of the sector's earnings cycle.

At the portfolio level, the concentration of MSOS in a small number of large MSOs means the fund's performance will remain tightly linked to the operational execution of Curaleaf, Trulieve, and Green Thumb Industries, as well as their ability to refinance debt and expand in limited-license states. Broader macro conditions, including interest rates and credit availability, also matter, since cannabis operators remain sensitive to the cost of capital. Structural risks include counterparty exposure from the fund's swap-based structure, ongoing federal-state legal tension, and the sector's persistent volatility. The balance between further regulatory progress and profit-taking will likely define the fund's path in the months ahead.

Using Tickeron’s AI Tools in My Research Process

I regularly turn to Tickeron’s AI Screener when analyzing specialized ETFs like MSOS. It helps me quickly compare technical indicators, fundamentals, and industry filters across thousands of securities, which adds efficiency to reviewing concentrated themes such as U.S. cannabis operators. The platform’s AI-generated signals and performance metrics have become a useful part of my routine for identifying related opportunities and tracking sector leadership shifts.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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Contributor

Jimmy Landsman|Expert

My name is Jimmy, and I’m a financial analyst focused on identifying compelling opportunities across the ETF market. Each day, I analyze hundreds of ETFs to uncover potential trading and investment opportunities using a broad range of market factors. For short-term trading, I rely heavily on technical analysis, including price channels, momentum indicators, support and resistance levels, trend patterns, and other market signals. At the same time, I dedicate significant attention to evaluating ETFs from a long-term investment perspective. My objective is to build a well-balanced ETF portfolio that combines core investment holdings with more tactical and speculative positions. The goal is to create a portfolio that can participate effectively in market rallies while also remaining resilient during periods of volatility and market corrections.

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