From Loss to Lift-Off: Marijuana ETFs Rebound on Legalization Prospects

Core Insights - Marijuana Exchange-Traded Funds (ETFs) have seen a significant resurgence, with some increasing over 100% in the past three months after a poor performance in 2024, driven by the U.S. administration's push for marijuana legalization [1][4] Market Performance - The cannabis market faced heavy losses in 2024 due to regulatory challenges and high tax burdens under IRS code 280E, despite a strong demand trend [2] - Market oversupply and competition from lower-priced illicit products led to disappointing quarterly results, causing major ETFs like AdvisorShares Pure US Cannabis ETF (MSOS) and Amplify Seymour Cannabis ETF (CNBS) to decline over 45% last year [3] Regulatory Changes - A shift in outlook began in July 2025 when news surfaced about the potential rescheduling of cannabis from Schedule I to Schedule III, which could ease tax burdens and promote scientific research [4] - Recent political support from President Trump for marijuana legalization has further fueled investor optimism regarding federal cannabis policy changes [4] ETF Performance - AdvisorShares Pure US Cannabis ETF (MSOS): Experienced a 45.6% loss in 2024 but surged 114.5% in the past three months, with top holdings including Curaleaf Holdings (24.01%), Trulieve Cannabis (22.17%), and Green Thumb Industries (20.68%) [6] - Amplify Seymour Cannabis ETF (CNBS): Plummeted 52% in 2024 but rebounded with a 102.1% increase in the last three months, holding Trulieve Cannabis (16.07%), Green Thumb Industries (14.06%), and Curaleaf Holdings (12.31%) [7] - Roundhill Cannabis ETF (WEED): Declined 44.9% in 2024 but surged 120.2% recently, with top holdings including Curaleaf Holdings (28.85%), Green Thumb Industries (28.18%), and Trulieve Cannabis (25.54%) [8] - Amplify Alternative Harvest ETF (MJ): Fell 30.7% in 2024 but increased by 96.3% in the past three months, with major holdings in Amplify Seymour Cannabis ETF (49.30%) and Tilray Brands (21.11%) [9] - AdvisorShares Pure Cannabis ETF (YOLO): Lost 19.9% in 2024 but surged 79.3% recently, with top holdings including AdvisorShares Pure US Cannabis ETF (42.75%) and Village Farms International (16.04%) [10]