The narrative in the cannabis sector is still pretty clear as we had into the back half of 2021. Expectations for huge growth remain intact through roughly 2025 as more states pass legislation that either legalizes or decriminalizes marijuana use, both at the recreational and medicinal levels.
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In the first couple of months of 2021, several cannabis ETFs posted gains of more than 100% as cyclicals began clawing their back. A lot of those gains have been given back, but the three best-performing cannabis ETFs have still gained more than 40% in the first half of 2021.
The Amplify Seymour Cannabis ETF (CNBS) is the leader with a return of nearly 48%, but the ETFMG Alternative Harvest ETF (MJ), the largest fund in this space, and the Global X Cannabis ETF (POTX) are not far behind. The Cannabis ETF (THCX) also returned 37%.
A little further down the list are Meb Faber's Cambria Cannabis ETF (TOKE) and the AdvisorShares Pure Cannabis ETF (YOLO) with gains of around 25%.
U.S. based cannabis companies continue to struggle and are still where I believe the greatest opportunity lies. The AdvisorShares Pure U.S. Cannabis ETF (MSOS) returned a comparatively modest 10% as international markets, such as the United Kingdom and Canada, remain ahead of the U.S. in terms of both growth and legal status. As the U.S. starts to catch up to the world, I expect this performance trend to reverse and funds, such as MSOS, begin to take the lead.
The ETFMG U.S. Alternative Harvest ETF (MJUS) just launched in May and offers similar U.S.-only exposure at substantially the same price.
Here's the first half scoreboard for cannabis ETFs.