Sell the MSOS ETF to Buy Canadian LPs

You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.

Friends,

Cannabis stocks soared yesterday by 6.8%, but they are still down this week and this month. The Global Cannabis Stock Index closed yesterday at 4.56, which is down 0.4% this week and down 9.3% since 3/31. Cannabis stocks remain in a big, bad bear market.

It’s not hard to find poorly performing cannabis stocks, but one that stands out is AdvisorShares Pure US Cannabis ETF (NYSE Arca: MSOS).  It rallied yesterday by just 2.4% tt 2.14, which is down 18.3% since this newsletter told readers two weeks ago that MSOS should be sold. Since 3/31, it has dropped 18.0%, almost twice as much as the overall market.

In that prior piece, I warned that the shares outstanding of MSOS could come down, and yesterday, they fell by 1.3%. Since early March, the MSOS shares outstanding have declined by 2.7%.  Year-to-date, they are still up 2.0%. MSOS has trimmed its holdings. Since March 7th, exposure to Green Thumb Industries shares has dropped by 2.7%. Exposure to Trulieve shares has declined by 2.7% as well. Exposure to Curaleaf shares has fallen by 2.0%, and Cresco Labs exposure has pulled back 1.0%. Rounding out the holdings in excess of 5%, MSOS has cut exposure to Glass House Brands by 2.7% and to Verano Holdings by 2.7% as well. So, the largest cannabis ETF has been a seller in a down market.

I criticized MSOS for having too much exposure to its three largest positions, then at 67.5%. Yesterday, the top 3 represented 68.7%. Here is the performance of MSOS and those three MSOs year-to-date. All of these are down more than the Global Cannabis Stock Index:

I still don’t see MSOS as a good option for cannabis investors. In that last piece, I suggested  owning Amplify Seymour Cannabis ETF (NYSE Arca: CNBS) for those who want or need to be in an ETF. It is down a lot since the 3/27 newsletter, but it has declined by less than MSOS. Investors who like MSOs can buy some of the MSOs and avoid the high concentration and the management fee of MSOS too. Again, I think that the largest three MSOs should be avoided for now.

In that last piece, I shared that Canadian LPs are a good alternative investment. My model portfolio at 420 Investor now has 58% exposure to three Canadian LPs, a massive overweight. Those three are down a lot too in 2025. Unlike the MSOs, they don’t pay 280E taxation. Also, they aren’t struggling with debt.

While it’s not my largest holding, I do have a lot of exposure to Tilray Brands, which I increased after the financials were released and the stock plunged. For those who want exposure to cannabis, I think this could bounce further from its all-time low that was set yesterday. TLRY  has reduced its debt substantially (through share issuance), and it trades now at a discount to its tangible book value. GTBIF trades at 1.7X, while CURLF and TCNNF have negative tangible book value.

Even after soaring yesterday, TLRY is down 60.1% in 2025. Looking over the past three years, it is down more than MSOS:

Again, Tilray Brands is not my favorite Canadian LP of the three I currently own in the model portfolio, and there is a fourth that looks pretty good to me too. MSOs could benefit a lot from cannabis rescheduling and the elimination of 280E taxation, but these don’t appear to be happening in the near-term. Canadian LPs  have better balance sheets and are able to operate globally. They face a wicked tax in Canada, and, while there is nothing to suggest improvement in those rules is happening, they could improve.

MSOS has plunged. Traders and investors who like to buy beaten up stocks should stay away. There are better alternatives!

Sincerely,

Alan

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:

Exclusives

The Florida Cannabis Market Is Breaking Down

Financial Reports

Tilray Cannabis Revenue Drops 14% in FY25-Q3

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