The cannabis industry is experiencing significant growth as legalization efforts expand worldwide, creating new investment opportunities. A prime example are Cannabis-focused Exchange-Traded Funds (ETFs), which offer investors a way to gain diversified exposure to this burgeoning sector.
Below, we list five of the top cannabis-focused ETFs available to interest investors who believe in the sector’s potential. These ETFs provide a mix of geographical coverage, investment in various market segments, and strategic management to capitalize on the industry’s growth potential.
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Cannabis-Focused Exchange Traded Funds (ETFs)
*Note: ETFs are ranked by Net Assets of Funds in USD at the time of writing*
1. AdvisorShares Pure US Cannabis
The AdvisorShares Pure US Cannabis ETF (MSOS) is designed to provide exposure to U.S.-based cannabis companies, particularly multi-state operators (MSOs). It aims to benefit from the growth and legalization of cannabis in the U.S.
Key holdings of this fund include the following companies,
- Green Thumb Industries (GTBIF)
- Curaleaf Holdings Inc. (CURLF)
- Trulieve Cannabis Swap (TCNNF)
- Verano Holdings Corp. (VRNOF)
- Cresco Labs Inc. (CRLBF)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$920 million | 0.83% | 32.80% | -43.28% | N/A |
MSOS is managed by AdvisorShares, a leading provider of actively managed ETFs known for its specialized and innovative investment products. The Fund will concentrate at least 25% of its investments in the pharmaceuticals, biotechnology & life sciences industry group within the healthcare sector.
What sets it apart from direct competitors?
- Focus on Multi-State Operators (MSOs): MSOS specifically targets companies that operate across multiple states in the U.S., which are likely to benefit most from the expansion and consolidation of the legal cannabis market.
- Experienced Management: Managed by AdvisorShares, known for its expertise in niche and emerging market ETFs.
- Regulatory Adaptation: The active management allows the fund to quickly adapt to regulatory changes, which is crucial in the rapidly evolving cannabis market.
MSOS was launched in September 2020 and has quickly become a popular choice for investors looking to capitalize on the U.S. cannabis market’s growth potential.
2. Amplify Alternative Harvest
The ETFMG Alternative Harvest ETF (MJ) provides broad exposure to the global cannabis industry, including companies involved in legal cultivation, production, marketing, and sales of cannabis and cannabis-related products.
Key holdings of this fund include the following companies,
- Amplify US Alternative Harvest ETF (MJUS)
- Tilray Brands (TLRY)
- Innovative Industrial Properties Inc. (IIPR)
- Canopy Growth Corp. (CGC)
- SNDL Inc. (SNDL)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$246 million | 0.78% | 21.93% | -42.94% | -33.29% |
MJ is managed by ETFMG, an asset management company known for pioneering thematic ETFs that provide exposure to emerging sectors and investment opportunities.
What sets it apart from direct competitors?
- Global Exposure: MJ offers investors exposure to cannabis companies worldwide, providing diversification across various regulatory environments and market conditions.
- First Mover Advantage: As the first U.S.-listed ETF focused on cannabis, MJ has established a strong market presence and investor base.
- Broad Sector Coverage: The ETF includes companies involved in all aspects of the cannabis industry, from cultivation to biotechnology, ensuring comprehensive sector exposure.
MJ was launched in December 2015 and has gained popularity for its broad coverage of the global cannabis market and its role as a pioneer in cannabis investing.
3. Amplify U.S. Alternative Harvest
The ETFMG U.S. Alternative Harvest ETF (MJUS) focuses on U.S.-based cannabis companies, providing investors with exposure to the domestic cannabis market.
Key holdings of this fund include the following companies,
- Green Thumb Industries Inc. (GTBIF)
- Curaleaf Holdings Inc. (CURLF)
- Trulieve Cannabis Corp. (TCNNF)
- Verano Holdings Corp. (VRNOF)
- Innovative Industrial Properties Inc. (IIPR)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$69.75 million | 0.75% | 11.49% | -45.00% | N/A |
MJUS is managed by ETFMG, which leverages its expertise in thematic investing to provide targeted exposure to the U.S. cannabis market.
What sets it apart from direct competitors?
- Exclusive U.S. Exposure: MJUS is designed to capitalize on the growth of the U.S. cannabis market, which is one of the largest and most dynamic in the world.
- Focus on Multi-State Operators: The ETF targets leading U.S. MSOs, which are well-positioned to benefit from ongoing legalization and market expansion.
- Strategic Management: The active management approach allows the fund to adapt quickly to regulatory changes and market opportunities.
MJUS was launched in May 2021 and is ideal for investors looking to focus on the U.S. cannabis sector’s growth potential.
4. Amplify Seymour Cannabis
The Amplify Seymour Cannabis ETF (CNBS) focuses on providing exposure to the global cannabis and hemp industry. It invests in companies that derive a significant portion of their revenue from cannabis-related activities.
Key holdings of this fund include the following companies,
- Trulieve Cannabis Corp. (TCNNF)
- Green Thumb Industries Inc. (GTBIF)
- Curaleaf Holdings Inc. (CURLF)
- Tilray Brands (TLRY)
- Verano Holdings Corp. (VRNOF)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$31.5 million | 0.77% | 21.63% | -44.05% | -28.96% |
CNBS is managed by Amplify ETFs, which is known for its thematic and innovative investment products that cater to emerging market trends and sectors.
What sets it apart from direct competitors?
- Revenue-Focused Investment: CNBS targets companies that derive at least 50% of its revenue from cannabis, ensuring investment in market leaders.
- Global Diversification: The ETF includes global players, offering exposure to various regions with legal cannabis markets.
- Dynamic Management: The active management style allows for strategic adjustments based on market conditions and growth opportunities.
CNBS was launched in July 2019 and is tailored for investors seeking focused exposure to the cannabis sector with an emphasis on revenue-generating companies.
5. Roundhill Cannabis
The Roundhill Cannabis ETF (WEED) aims to provide exposure to companies involved in the legal production, distribution, and sale of cannabis and related products.
Key holdings of this fund include the following companies,
- Curaleaf Holdings Inc. (CURLF)
- Green Thumb Industries Inc. (GTBIF)
- Trulieve Cannabis Corp. (TCNNF)
- Verano Holdings Corp. (VRNOF)
- Cresco Labs Inc. (CRLBF)
| Net Assets of Fund | Expense Ratio | 1-yr Return | 3-yr Return | 5-yr Return |
| ~$5.8 million | 0.40% | 41.62% | N/A | N/A |
WEED is managed by Roundhill Investments, a company known for its innovative thematic ETFs that capture emerging market trends.
What sets it apart from direct competitors?
- Growth-Oriented Strategy: WEED focuses on companies with strong growth potential within the cannabis sector.
- Diverse Holdings: The ETF includes a range of companies across different segments of the cannabis industry, from cultivation to biotechnology.
- Market Adaptability: The fund’s dynamic investment strategy allows for adjustments based on regulatory changes and market conditions.
WEED was launched in July 2020 and offers investors a way to gain exposure to the cannabis industry’s growth through a diversified portfolio of leading companies.
Final Thoughts
Less than a decade ago, exposure to the Cannabis sector basically did not exist for retail investors. Now, legalization efforts have created widespread opportunities in a short period of time, with modern investment vehicles like ETFs providing accessibility through online brokers. Just note that while there may be an opportunity for great growth, like any young industry, investors should expect a simultaneous increase in volatility.
