CA - MSOS: Investors Should Exit This ETF

2024-02-04 11:30:13 ET

Summary

• AdvisorShares Pure US Cannabis ETF has experienced significant volatility, but has seen a recent increase in value due to potential cannabis rescheduling.
• The ETF is poorly diversified, with the top two holdings making up over 43% of the fund and the top six holdings comprising 88%.
• MSOS could rally if 280E goes away, but it could plunge to new lows if it remains.

I really liked AdvisorShares Pure US Cannabis ETF ( MSOS ) early on. This was not the first ETF for the cannabis space, but it was a great effort to help funnel investments into U.S. cannabis operators. The ETF is way down from its peak in early 2021 and from its initial offering price in 2020, but it's up a lot from the all-time low set in August 2023. I warned investors to avoid MSOS in early August when the stock closed at $5.29, and it fell in late August to a low of $4.78. Of course, this was before the Department of Health & Human Services recommended that cannabis be rescheduled by the DEA, which has excited investors....

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