There are 10 ETFs investing in cannabis right now, but there’s only one that makes the cut as the best to buy in 2021.
That’s because the holdings in the cannabis ETF we’re about to share principally have the same three attributes:
- The companies are American.
- They sell cannabis directly.
- And they sell cannabis through multiple states.
Here’s why those three criteria make this the best cannabis ETF to buy…
Global marijuana sales in 2019 reached $15 billion. Of that $15 billion, $13.6 billion was sold in the United States.
That’s particularly impressive considering that cannabis is still federally illegal in America and it can’t be sold everywhere.
As more states legalize, data analytics provider Nielsen predicts that U.S. sales could cross $40 billion by 2025. There are always exceptions to the rules, and there will be a few companies outside of America worth owning.
But you will make the most money in cannabis investing by buying American companies.
The ETF we’re about to share holds the best of the best U.S. cannabis companies.
U.S. Companies Need to Sell Cannabis Directly
Innovative Industrial operates as a landlord to marijuana businesses, and GrowGeneration sells equipment and supplies for growing cannabis.
But again, with sales reaching $40 billion by 2025, the biggest opportunity for investors remains in investing in companies that directly sell cannabis.
Cannabis Companies Need to Build a Brand Across Multiple States
A cannabis multi-state operator (MSO) is a company that operates businesses in multiple states.
By doing that, they are starting to set the groundwork to build the next “Starbucks of Cannabis.”
You can buy a cold brew coffee in a Starbucks in New York, you expect it to taste the same in Florida. That’s because Starbucks has built a reputation for providing a consistent and reliable experience.
Cannabis is no different.
If people buy an edible product from a certain brand in California, if they visit Las Vegas and see that same product on the shelf, they expect it to provide that same safe, consistent, and reliable experience as when they first tried it.
So the companies that are operating in multiple states now are setting the groundwork for becoming a national brand and winning over the largest chunk of customers.
With that in mind, it’s time to reveal the best cannabis ETF to buy right now…
The Best Cannabis ETF to Buy: Pure US Cannabis ETF
Portfolio Manager: Dan Ahrens
Stock Ticker: MSOS
The New York Stock Exchange (NYSE) and Nasdaq do not list U.S. companies that sell marijuana on their exchanges because cannabis is illegal to grow, sell, and buy under federal law. The exchanges don’t want to run the risk of giving a federally illegal business a platform to raise money.
That means marijuana ETFs are filled with Canadian companies, medical companies with loose ties to the cannabis industry, or pick-and-shovel plays.
But with the launch of the AdvisorShares Pure US Cannabis ETF (NYSEArca: MSOS), a massive change is taking place.
The holdings in MSOS are filled with the best U.S. companies that sell cannabis across multiple states.
The cream of the crop includes…
- Cresco Labs Inc. (OTC: CRLBF)
- Curaleaf Holdings Inc. (OTC: CURLF)
- Trulieve Cannabis Corp. (OTC: TCNNF)
- Green Thumb Industries Inc. (OTC: GTBIF)
- AYR Strategies Inc. (OTC: AYRSF)
- Jushi Holdings Inc. (OTC: JUSHF)
- Columbia Care Inc. (OTC: CCHWF)
- Vireo Health International Inc. (OTC: VREOF)
- Akerna Corp. (Nasdaq: KERN)
It’s also important to note that the companies listed above aren’t just selling cannabis in one or two dispensaries. They already have significant operations set up and are expanding. Trulieve has 63 dispensaries in Florida and is setting up operations in Massachusetts and Pennsylvania.
Columbia Care is currently selling or has plans to sell marijuana in 13 states, ranging from Arizona to New Jersey, and Green Thumb Industries has licenses for 96 retail locations spread out across 12 states.
With those picks mentioned earlier making up the bulk of the holdings in MSOS, it’s a good way for anyone to get started with cannabis investing.
January 29 2021