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One of the hardest hit parts of the market in 2021 has been the American cannabis companies, which has been evident in the performance of the AdvisorShares Pure US Cannabis ETF , but it looks like interest has surged in November.
What’s driving the ETF higher is likely the talk of the pending introduction of the States Reform Act by Republican Representative Nancy Mace, a bill that would legalize cannabis federally with less FDA involvement and lower taxes compared to the Democratic legislation, the Cannabis Administration and Opportunity Act.
Perhaps more interesting than the price action in MSOS has been the surge in volume.
AdvisorShares CEO Noah Hammon suggests that the money has come from “a combination of retail/self directed, some advisors, and then probably hedge funds and family offices.” We struggle to understand how so much money could come in such a short period of time from such a broad array of investors, but we have no way to identify the source of funds.
From our vantage, it appears as if a large investor or perhaps a group of large investors is using this ETF to invest in American cannabis companies.
We believe that additional investment into the sector by the fund could benefit even names not held by the ETF as other holders sell stocks in it that are rising and buy other stocks in the sector.
The surge in interest in this ETF earlier in the year followed a massive rally in Q4, when MSOS gained 46.6%, while the renewed interest follows an extended decline that has left the stocks of many of the leading cannabis operators and this ETF still down in 2021.
and operating globally, urban-gro has built over 300 controlled environment agriculture facilities, spanning over five million square feet.
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