Marijuana ETFs blaze higher last week
Cannabis ETFs were blazing after Representative Nancy Mace (R-SC) tweeted that she plans to unveil a new bill that would legalize marijuana at the federal level. The bill would remove the plant from the list of federally controlled substances.![]()
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While cannabis-related ETFs have been on a decline for much of the year, this news was enough to lift them by double digits last week. The U.S.-focused $Advisorshares Trust Pure Us Cannabis Etf(MSOS.US$ gained 14.0% in past week. The $Advisorshares Pure Cannabis Etf(YOLO.US$ and the $Etfmg Alternative Harvest Etf(MJ.US$, which take a global approach, were up 12.8% and 10.9%, respectively.
Cannabis-related ETFs shot higher after Joe Biden's nomination. Both he and Vice President Harris had stated they were in favor of policy reform. President Biden, however, has only backed medical legalization and decriminalization.
The lack of movement on the issue after Biden took office brought these ETFs off their highs. But Mace’s bill, which would see marijuana regulated similarly to alcohol, could appeal to those on the right side of the aisle because it invokes states'rights.![]()
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The proposed bill would also not call for the degree of regulation or taxation as prior legalization bills have, such as of that proposed by Senator Chuck Schumer.
Several Options Available
Here is a list of Marijuana ETF ranks by AUM, with MJ and MSOS being the largest, at over $1 billion in AUM each.![]()
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Currently, the cheapest cannabis ETF is the $Cambria Cannabis Etf(TOKE.US$, with a 0.42% expense ratio. This is significantly lower than the average expense ratio of 0.71%. The low cost is especially notable when you consider that TOKE is active.
Though it is 0.33% cheaper than the passive MJ, TOKE has underperformed by 4.1% year-to-date.
Domestic or Global
Legalization is not just a domestic issue. In fact, the U.S. has some of the most marijuana-friendly laws around the world. The substance remains illegal in much of the world.
Though this suggests there is substantial growth ahead for global cannabis-related companies, current legalization talks in the U.S. are likely to benefit domestically focused ETFs such as MSOS the most.
Source: ETF.com, ETF Managers Group
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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NBCNBC : awesome
Dartist : wow
Winner01 : good
103128352 : $Tilray Brands (TLRY.US)$ why drop so much then
Bill Hartnett :
smt914 at Sg : blaze higher ????? fell like rock today . ..what's up with u?
ETF HubOP smt914 at Sg: It is a recap for last week
ETF HubOP 103128352: Some analysts see little likelihood of legalization under the Biden administration
we need to keep eyes on related policies and rules if we want to invest in it
FAB101845437 : Sidelined and waiting
Win or Lost : Wonderful
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