ETF MSOS records 20.5% appreciation and highlights strength of American operators

The North American cannabis market has shown positive short-term volatility, standing out in the financial scenario. The ETF MSOS (AdvisorShares Pure US Cannabis) accumulated a significant appreciation of 20.5% throughout 2025.

This performance contrasts with the global cannabis financial sector, which ended 2025 with mixed results. The New Cannabis Ventures Global Cannabis Stock Index, the main reference in the market, recorded a 4.2% decrease, closing at 6.59 points. This marks the fifth consecutive annual devaluation of the index.

However, the long-term analysis of the ETF MSOS still reveals a challenging scenario, as explained by Alan Brochstein in an article for New Cannabis Venture. The five-year cumulative return is -87.1%, dropping from prices close to US$36.50 at the end of 2020 to US$4.72 at the end of last year. In early 2026, the fund records a 3.0% decline, quoted at US$4.58.

Regulatory expectation drives ETF MSOS

The movement of investors towards the ETF MSOS and the increase observed in December 2025 are largely attributed to the expectation of cannabis reclassification in the United States. The central focus is the potential elimination of the taxation provided for in Section 280E of the American tax code.

If the reclassification occurs and the tax barrier is removed — including possible forgiveness of past debts — the impact would be extremely positive for Multi-State Operators (MSOs). However, uncertainty about the realization and timeline of this regulatory change keeps the market on alert.

The trading volume, which was significant in December, showed a sharp reduction at the beginning of 2026. This indicates caution on the part of traders regarding the ETF MSOS. Analyses suggest that if Section 280E remains in force, the asset's liquidity may be compromised, making it difficult for new buyers to enter.

Market concentration and companies' performance

The ETF MSOS portfolio has a high concentration in three large multinational companies. Together, they represent 67.7% of the fund. The individual performance of these companies at the beginning of 2026 reflects the sector's instability:

- Trulieve (OTC: TCNNF): Current largest fund position, recorded a 5.6% decrease;

- Green Thumb Industries (OTC: GTBIF): Second largest position, appreciated 2.0%;

- Curaleaf (OTC: CURLF): Facing challenges related to indebtedness, fell 1.4%, moving to the third largest position in the fund.

Outlook for ETF MSOS and diversification

Given the volatility of MSOs and the dependence on political decisions, financial reports point to the need for diversification. Sector experts indicate that ancillary segments and Cannabis Real Estate Investment Trusts (REITs) may offer a more balanced risk-return ratio.

These alternatives have less direct exposure to the binary risk of maintaining or reducing Section 280E, which directly affects the ETF MSOS. In addition, licensed Canadian companies also emerge as options observed by the market while the tax definition in the United States is not finalized.

With information from New Cannabis Ventures