New Leveraged Marijuana ETF

Managers of the largest marijuana-focused Exchange Traded Fund now offer a 2X leveraged marijuana fund. Investors must ask themselves, “will this 2X leveraged fund give their portfolio what it needs right now to get back on track in 2022?”

The AdvisorShares MSOS 2X Daily ETF (MSOX) will offer investors a way to gain 200% exposure to the basket of marijuana stocks that the AdvisorShares management team deems viable investments.

The same company manages MSOX as the AdvisorShares Pure U.S. Cannabis ETF (MSOS). MSOS is the largest marijuana-focused fund by market capitalization at $631 million.

MSOS has overtaken the previous ETF to hold that title, the ETFMG Alternative Harvest ETF (MJ), which now has assets under management of just under $400 thousand.

With MSOS being as popular as it is, it makes sense for AdvisorShares to offer a 2X leveraged product. Especially with several states of local governments planning on voting on the legalization and decriminalization of marijuana use. If a few more states start allowing the use of marijuana, we may see the next big rally in the space. This would put MSOS and, of course, MSOX in an excellent position to capitalize on the move higher.

But making a profitable investment usually isn’t always relatively that easy. The MSOX or 2X ETF also deals with contango. The fund tells investors that MSOX should only be used for daily exposure, not a long-term holding.

Plus, little things like when a fund like this debuts is important. For example, the ETFMG 2X Daily Alternative Harvest ETF (MJXL) is essentially the same ETF as the new MSOX. They both offer investors 2X leverage on the marijuana industry.

However, MJXL debuted in July of 2021, and if you have followed the marijuana industry, you will know that industry has been down since around February 2021. The falling underlying assets or company stock prices and the daily contango effect have left MJXL with minimal assets under management. Currently, MJXL has just over $563 thousand in assets.

ETFMG also has the 2X inverted marijuana ETF, the ETFMG 2X Daily Inverse Alternative Harvest ETF (MJIN). This ETF allows investors to short the marijuana industry and get 2X the short exposure. Like MJXL, MJIN doesn’t have a lot of assets under management at just $9.95 million, but it is ten times more than MJXL currently has under control. Continue reading "New Leveraged Marijuana ETF"

This Sector Has The "HIGH-est" Performing ETFs

We have seen a lot of wild things occur in 2021, but hey, shouldn’t we have expected that considering it’s the encore act to a truly unforgettable 2020?

With the way big technology stocks such as Apple (APPL), Roku (ROKU), Amazon (AMZN), and Alphabet (GOOG) performed in 2020, one may think these stocks would continue to be big winners during the early part of 2021. Therefore the technology-heavy Exchange Traded Funds would also be the best performers thus far. But that is not the case. Perhaps the Tesla (TSLA) effect on the electric vehicle market would continue to move forward with the Democrats, who are seen as a more environmentally friendly political party in the White and controlling the House and Senate. But that also hasn’t been the case.

The industry that has been on a tear since the start of 2021 is one that a few years ago was coined as “the next great industry,” but that fire quickly smoked out when valuations and expectations grew far too high, way too fast. However, now that the industry is a little more mature developed. Investors have more realistic expectations, combined with the prospects of the industry being able to “legally” operate in more states and countries around the world, and investors really do need to start looking at what it has to offer them and perhaps make an investment in it, before this weed grows high.

If you haven’t guessed yet or scrolled ahead, I am referring to the marijuana industry. I mentioned this industry just a few months ago as one you may want to start watching, and I am reiterating that idea today. While some investors may want to go into this newer industry cherry-picking stocks, I believe the Exchange Traded Funds that focus on this industry are the best way to invest in this growth industry.

Oh, and have I mentioned these marijuana ETFs are the best performing non-leveraged ETFs year-to-date? Let’s take a look at some of them and which ones I personally prefer as an investment option. Continue reading "This Sector Has The "HIGH-est" Performing ETFs"

Now Could Be the Best Time To Buy Marijuana ETFs

After a few years of marijuana stocks being high-flyers, largely due to investors rushing in for fear of missing out on the next big industry, the marijuana industry has not been kind to those early investors in recent years. However, that all may be changing very soon.

With a few more States recently voting to legalize the drug and the U.S. House of Representatives scheduled to vote on the decriminalization of marijuana, it truly now appears that it is just a matter of time until the drug is legally sold throughout the United States.

Furthermore, the Mexican government appears to also be on the verge of legalizing the drug as well. If Mexico does legalize marijuana, it could become the largest cannabis market in the world. And since Mexico's climate is ideal for growing marijuana, it could become a powerhouse in terms of a worldwide supplier, or at a minimum, the top North American supplier. However, none of the major Canadian marijuana companies have a foothold in Mexico yet, which could cause delays in how long investors need to wait to see any meaningful gains from their investments in the industry today.

Regardless, though with more U.S. States legalizing it and decriminalization votes set to take place in the U.S. legislature, and Mexico appearing to be on the verge of legalizing the drug, now would seem like a good time to get on the train. It's usually better to be early than it is to be late.

So, if you are ready to buy into the industry, or even if you want to wait, let me give you a few options you can look at Continue reading "Now Could Be the Best Time To Buy Marijuana ETFs"

3 Interesting ETFs To Take Closer Look At

New ETFs are continually being brought to market as new niche ideas of capitalizing on an industry are being developed daily. But, not only are new ETFs the only ones that are worth looking at, older, more established ETFs which you may have forgotten about are also good to follow up on and even add to your watchlist. With that in mind, from time to time, I like to point out new and old ETFs that I come across which interest me and may intrigue others.

Today, let us look at one new ETF, one old ETF, and one ETF that is not yet trading but will soon be available for purchase.

The new Exchange Traded Fund is the AdvisorShares Pure US Cannabis ETF (MSOS). I know what you are thinking, just another marijuana ETF. Well, yes and no. This is a marijuana ETF; however, unlike all the other marijuana ETFs available before this one, all U.S. ETFs is the first. The others had, in large part, Canadian cannabis companies. This ETF only holds U.S. based firms. This ETF debuted on September 1st, 2020. It has an expense ratio of 0.74%, which is not cheap, but also not terribly outrageous. It currently has just $11 million in assets, but that should grow with time. We have no performance history on the ETF since it is so new, but the marijuana industry has struggled over the last few years. With that being said, this is a new ETF, so it comes with a clean slate, but we shouldn't expect it to boom in the short term unless we have major progress in the industry, as in more states passing marijuana as a legal substance. With that said, now would be a good time to get involved with this type of investment, as we are expected to have more states legalizing the drug in the next few years. Continue reading "3 Interesting ETFs To Take Closer Look At"

An Industry That Could Be A "Savior"

A few years ago, the investing world was enthralled with the idea that the marijuana industry was going to be the ‘next big investing trend.’ Unfortunately, for most who bought into the hype, the investments in the industry have not lived up to their promises. However, that may soon be changing.

The big marijuana players and their investors have all suffered over the years for several reasons. First, the industry is simply too fragmented for a single or handful of players to dominate the landscape. This is an issue because while competition is good, too much competition doesn’t allow individual companies in the industry to experience the power of ‘scale.’

What that means is, let’s say a marijuana company opens a farm. The farm may be large enough to produce 100 pounds, which is enough to cover the costs of the farm and the farmer. However, that 100 pounds aren’t enough to cover the cost of the transportation of the product from the farm, the distribution center, the security for the farm and distribution center, or the research and development so that the farmer can become more efficient and offer different strains. The fragmentation of the industry also hurts pricing power. The more competition means people trying to push product, perhaps simply to cover costs, means prices hit near rock bottom.

Another reason the industry has suffered is the very slow progress of legalizing marijuana both in most US States and the vast majority of countries around the world. With only a handful of states in the US having legalized the plant and the Federal Government still considering it a controlled substance, adoption rates around the country have been sluggish. When the industry was expecting to grow due to increasing numbers of legalized States rapidly, investors were pouring money into them. However, that money has begun drying up, which is now causing problems on balance sheets and debt levels. Continue reading "An Industry That Could Be A "Savior""