Cannabis Stocks for 2021: Multi-State Operators

After the election, 15 states now have legalized adult recreational cannabis use, including liberal bastions like South Dakota and Montana. Every single state that had legalization on the ballot approved it. 

Another 22 states have medical programs.

At the national level, the House voted last week to decriminalize cannabis with no chance of Senate approval on Mitch’s watch. But it’s a big signal where things are headed.

Multi-state operators (MSOs) are seeing the bulk of the action. These stocks will rip when cannabis gets removed from the Controlled Substance Act (CSA).

The ten largest cannabis firms in the U.S. are expected to generate US$5.5 billion in sales next year, up from $3.3 billion this year. Topline revenues are expected to grow at a 50%-100% clip with 30-40% gross margins for the next few years.

A good way to get access to cannabis multi-state operators in the US is with the AdvisorShares Pure US Cannabis ETF (NYSE: MSOS).

MSOS is the first and only actively managed U.S.-listed ETF with dedicated cannabis exposure focusing exclusively on U.S. companies, including multi-state operators. 

It is 100% US-focused. It is over 57% weighted to multi-state operators. 

Its top four holdings as of December 2020 are:

  • Curaleaf Holdings (CSE: CURA)(OTC: CURLF)
  • Green Thumb Industries (CSE: GTII)(OTC: GTBIF)
  • Cresco Labs (CSE: CL)(OTC: CRLBF)
  • Trulieve Cannabis (CSE: TRUL)(OTC: TCNNF)

To spread the risk in this still quickly evolving sector buying the ETF makes sense for most investors.

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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