AdvisorShares MSOS Climbs 8% As Cannabis Rescheduling Sparks Investor Interest

Author: Rolando García | October 23, 2024 08:32am

As the U.S. cannabis industry expects significant regulatory changes, AdvisorShares, a leading provider of cannabis-focused Exchange-Traded Funds (ETFs), shared the company’s view regarding the near future.

Managing over $1 billion in assets, the company's ETFs offer targeted exposure to U.S. multi-state operators (MSOs), providing opportunities for exposure to a market that’s been quite a rollercoaster ride over the last several years but might finally find some ground for sustainable growth.

“Cannabis continues to gain mainstream acceptance,” Dan Ahrens, managing director at AdvisorShares, said in a recent statement. “And we believe elections and reforms are setting the stage for growth.”

AdvisorShares offers three investment funds: the flagship ETF, MSOS (NYSE:MSOS), focuses on U.S. cannabis companies, while MSOX (NYSE:MSOX), designed for more experienced traders, offers leveraged exposure.

YOLO (NYSE:YOLO) blends U.S. cannabis exposure with global equities.

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Among the referred key changes, the trust fund managers address the potential rescheduling of cannabis from Schedule I to Schedule III, which would significantly reduce tax burdens for U.S. cannabis operators. Also, increasing public support is mentioned, with over 92% of more than 43,000 public comments during the DEA hearing process favoring rescheduling.

In the upcoming elections, state ballot initiatives, particularly in Florida, Nebraska and North Dakota, are expected to further boost the market. Florida, where medical marijuana sales top $2 billion, could approve adult-use legalization, expanding the market to $5 billion annually.

MSOS Stock Surges On Bullish Momentum

This release had an impact on MSOS performance Tuesday. The MSOS ETF saw a sharp rise, closing at $7.68 after an 8.17% increase.

It broke above both the 8-day and 20-day simple moving averages, signaling strong upward momentum. The MACD shows positive movement with a reading of 0.09, while the RSI of 66.21 nears overbought territory, indicating the potential for a short-term pullback.

Chart created using Benzinga Pro

However, other indicators like Bollinger Bands show MSOS trading near the upper band, suggesting increased volatility. While bullish indicators remain, investors should watch for possible consolidation in the short term.