Episode summary
ETF of the Moment: A Budding Comeback for Cannabis | Trillions
Trillions
· · Hosts: Eric Balchunas, Joel Weber · Guests: Andre Yapp
Summary
The episode launches a new recurring segment on the “ETF of the moment,” using short-term performance and trading volume to find funds that are suddenly drawing attention. This time the focus is MSOS, the AdvisorShares Pure US Cannabis ETF, which the host and Andre Yapp say fits the screen because it is up about 44% in the past month while volume is up about 56%. The move is tied to a more accommodating regulatory backdrop after the Department of Justice moved marijuana from Schedule I to Schedule III.
Key takeaways
- Andre Yapp says MSOS is up about 44% in the past month while trading volume is up about 56%, signaling a sharp burst of attention.
- The DOJ’s move from Schedule I to Schedule III could let medical marijuana businesses deduct ordinary expenses, improving cash flow.
- The benefit applies only to the medical side, while recreational sales still face the old tax regime, limiting the upside.
- MSOS is the only cannabis ETF with more than $1 billion in assets, which the host says gives it more staying power than rivals.
- Andre Yapp says the ETF is volatile and should be sized small, around a 1% allocation, unless an investor is very bullish on the industry.
Notable quotes
“The one we're going to focus on today is a ticker MSOS. For people who don't know what it's the AdvisorShares Pure US Cannabis ETF”
“the Department of Justice has moved marijuana from a schedule one narcotic or drug to a schedule three drug”
“it holds cannabis companies, but the thing with the ETF is that it can't hold these companies the stocks directly. It holds them through swaps”
“MSOS also has a leveraged version. I mean, if you really if you want some like jalapeño, like ghost pepper, MSOX is 2X MSOS”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. Welcome to Trillions.
I'm Joel Weber. And I'm Eric Balchunas. Eric, we've been experimenting with some new things on Trillions.
One is a new episode that is three ETFs uh that are new launches, tickers to watch. This is going to be another ongoing new episode that we're going to do about an ETF of the moment. What's going to be uh the one that we're talking about this episode?
Yeah, just a little background on this. So, we write a note for BI that comes out every month that we look at one ETF that's sort of like we don't want to look at something that just performed so well over the past year or three years, but what's something that's like performing well in the recent month or two and is seeing more volume. So, if it like starts to see way above average numbers in the short term relative to its averages we want to highlight that because it's like a swell before it becomes a wave potentially.
And so we and also when you use these quantitative measures, you come up with ETFs that aren't obvious. You know, we're not picking the same 10 that everybody knows. So, this is a way to unearth some interesting like up and coming future star ETFs.
And so, we've done this uh I don't know about 10 times. It's good to do a podcast after cuz people are again looking for tickers and investment ideas. The one we're going to focus on today is a ticker MSOS.
For people who don't know what it's the AdvisorShares Pure US Cannabis ETF, which is one of many of them, but a sector that's been beat up really bad, but just recently got some good news and the ETFs are reflecting that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- cannabis etf
- msos
- justice department rescheduling
- etf inflows
- etf swaps
Companies and tickers mentioned
- AdvisorShares
Watch the episode
Watch “ETF of the Moment: A Budding Comeback for Cannabis | Trillions” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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