Dazed By The Cannabis ETF Whirlwind? Here Is A Short Guide To Survival
Portfolio Pulse from Patricio Liddle
Cannabis ETFs are experiencing dynamic changes due to significant regulatory shifts, notably the Department of Health and Human Services' recommendation to reclassify cannabis, and growing Congressional support. The introduction of swap options for U.S. Multi-State Operators (MSOs) has allowed ETFs like MSOS to navigate federal restrictions, leading to a notable performance disparity among cannabis ETFs. MSOX has seen an 88.4% increase YTD, while THCX and POTX are set to close due to challenges from lacking U.S. MSO swap exposure.
February 09, 2024 | 5:13 pm
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POSITIVE IMPACT
AdvisorShares Pure US Cannabis ETF benefits from swap options, navigating federal restrictions amid regulatory shifts.
The introduction of swap options for U.S. MSOs allows MSOS to engage with the cannabis market despite federal restrictions, likely boosting its performance.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
AdvisorShares MSOS 2x Daily ETF sees a significant 88.4% increase YTD, benefiting from swap options for U.S. exposure.
MSOX's innovative approach using swaps to gain U.S. exposure has led to substantial gains, indicating a positive short-term impact.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
Global X Cannabis ETF also set to close due to challenges from lacking U.S. MSO swap exposure.
POTX's impending closure indicates the critical role of swap options for U.S. exposure in the cannabis ETF market, suggesting a negative short-term impact.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
AXS Cannabis ETF set to close, highlighting challenges from lacking U.S. MSO swap exposure.
The closure of THCX reflects the difficulties faced by ETFs without swap options for U.S. exposure, likely negatively impacting its short-term performance.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80