MSOS: 4th Quarter 2025 Portfolio Review
Portfolio
Performance
The AdvisorShares Pure US Cannabis ETF (MSOS) delivered a solid year to date increase of +23.35% net asset value (NAV) / +24.01% (market) as of December 31st, 2025, beating the S&P 500 Index which was up +17.88% for the same period. In the fourth quarter of 2025, it returned -2.79% (NAV) / -2.69% (market), lagging by the S&P 500 Index return of +2.66% for the quarter. The decline in the fourth quarter reflected continued volatility within the cannabis sector and ongoing uncertainty around the timing and scope of federal reform. Late in the quarter, market speculation surrounding a potential executive order briefly boosted investor confidence that progress on U.S. cannabis policy was imminent. However, those gains proved short-lived, as the rally ultimately gave way to a “buy-the-rumor, sell-the-news” dynamic following the actual executive order announcement.
Portfolio
MSOS upheld its focused strategy during the quarter, staying predominantly invested in the biggest multi-state operators (MSOs). By the close of Q4 2025, the leading five MSOs comprised 81.56% of the holdings, aligning with previous periods and underscoring the ETF’s belief in the enduring strength of these key industry leaders.
Top 5 MSO portfolio allocations by quarter:
- Q1 2025: 81.06%
- Q2 2025: 84.04%
- Q3 2025: 80.38%
- Q4 2025: 81.56%
This concentration illustrates our purposeful emphasis on the entities with the most extensive operations, deep expertise, and presence in primary regional markets.
Positions
Over the period, MSOS adjusted allocation sizes among current investments. These modifications sought to more accurately align with anticipated policy shifts and manage excessive position sizes.
Winners and Losers
Several holdings contributed positively to performance during the period, benefiting from improved sentiment and company-specific developments.
- Trulieve Cannabis Corp (TCNNF): +3.45% for Q4 / +67.65% for 2025
- Glass House Brands Inc (GLASF): +15.51% for Q4 / +52.59% for 2025
- Village Farms International (VFF): +24.57% for Q4 / +373.41% for 2025
Conversely, certain holdings detracted from quarterly performance.
- Green Thumb Industries (GTBIF): -4.67% for Q4 / -1.64% for 2025
- Cresco Labs (CRLBF): -11.85% for Q4 /| +34.61% for 2025
- Curaleaf Holdings Inc (CURLF): -13.40% for Q4 / +61.54% for 2025
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| TCNNF | TRULIEVE CANNABIS CORP | 24.91% |
| CURLF | CURALEAF HOLDINGS INC | 21.75% |
| GTBIF | GREEN THUMB INDUSTRIES | 21.14% |
| CRLBF | CRESCO LABS | 6.95% |
| GLASF | GLASS HOUSE BRANDS INC | 6.81% |
| VRNO | VERANO HOLDINGS CORP | 6.35% |
| TSNDF | TERRASCEND CORP | 4.85% |
| JUSHF | JUSHI HOLDINGS INC | 2.34% |
| VFF | VILLAGE FARMS INTERNATIONAL | 1.49% |
| CXXIF | C21 INVESTMENTS INC | 0.73% |
As of 12.31.2025. Cash is not included. Holdings are subject to change.
Please see our complete fund holdings at advisorshares.com/etfs/msos. The holdings details are updated each market day.
Cannabis Landscape
Cannabis Landscape
The final quarter of 2025 witnessed varied advancements in cannabis oversight alongside increasing bipartisan endorsement. President Trump issued an executive order on December 18 directing the Attorney General to swiftly finalize the rescheduling of cannabis to Schedule III, including the possibility of Medicare covering CBD products, acknowledging its medical value and lower abuse risk.1 This monumental step represents a historic pivot in federal drug policy, potentially unlocking research, easing tax burdens under Section 280E, and signaling broader acceptance of state-legal operations. However, volatility remains a hallmark of the sector, as evidenced by sharp market swings following the announcement, including a post-order sell-off that underscored fragile investor sentiment.
Rescheduling is just the beginning of needed reforms, it won’t fully resolve persistent challenges like restricted banking access, where major financial institutions continue to shun the industry due to ongoing federal prohibitions. True stability requires comprehensive measures such as the SAFER Banking Act to enable secure financial services and uplisting to major U.S. exchanges like NYSE or Nasdaq, which would enhance liquidity, valuations, and institutional investment.2
Federal efforts encountered hurdles, with the DEA extending its rescheduling review amid administrative transitions, though the executive directive aims to accelerate the process. Meanwhile, legislative proposals addressed hemp definitions and curbs on synthetic intoxicants like delta-8 THC, with current federal legislation banning intoxicating hemp products by November of 2026.
At the state level, progress diverged. Texas enacted bans on certain hemp-derived THC items amid regulatory debates, while California deferred its upcoming excise tax hike until 2030. Delaware initiated recreational sales earlier in the year, Minnesota clarified rules on paraphernalia and tribal agreements, and Nebraska rolled out urgent medical cannabis guidelines. Nationwide, over 30 states enacted or approved limits on hemp-based intoxicants, with ongoing Farm Bill discussions influencing these areas.3
Regulated markets advanced further. New York’s legal sector hit an annualized run rate of $842 million by mid-2025, nearing $2 billion in total sales with 428 operational stores. Ohio’s nascent adult-use initiative exceeded $600 million in revenue, posting daily averages around $1.8 million. 4
Yet, commoditization intensified. Wholesale flower prices dropped approximately 32% since 2021, and black-market rivalry persists at scales rivaling legal volumes in states like California. Sector-wide, outstanding taxes and obligations surpassed $3.8 billion.4 Countering these pressures, specific categories grew robustly. Edibles are forecasted to hit $48.7 billion worldwide by 2030, with drinks and enhanced pre-rolls overtaking vapes in unit volume.5
Outlook
During Q4 2025, the U.S. cannabis sector displayed a combination of steadiness and targeted expansion against ongoing fluctuations, with federal rescheduling initiatives delayed by DEA extensions and political shifts yet propelled by executive support and regional expansions. Moving forward, heightened positivity points to substantial potential for growth, prioritizing selective allocations to stronger-performing state markets, consolidated operations, high-end cultivation methods, and supporting innovations in online commerce, logistics, and financial tech, dependent on forthcoming federal adjustments and industry evolution.
As 2026 unfolds, the cannabis industry anticipates transformative impacts from rescheduling’s implementation, potentially alleviating 280E tax constraints and fostering research, though full benefits hinge on congressional action for banking reform and uplisting. Volatility may persist amid regulatory fine-tuning, while meaningful opportunities remain for MSOs through mergers and acquisitions, renewed capital inflows, and ongoing industry consolidation. State expansions and maturing programs could drive sales growth bolstered by policy tailwinds and consumer trends toward wellness products.
Sources:
1. The White House. Presidential Actions. Increasing Medical Marijuana and Cannabidiol Research. December 18th, 2025.
2. MJBizDaily. News. Big banks still refusing cannabis despite Trump marijuana rescheduling. January 9th, 2026.
3. Cannabis Science and Technology. What Happened in 2025 and What’s Next? December 23rd, 2025.
4. Crain’s Chicago Business. Pletz, John. State cannabis taxes slipping as prices continue to fall. November 26th, 2026.
5. CRB Monitor News. Huffman, Zack. 2025 Cannabis Market Review. January 15th, 2026.
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Cheers,Past Commentary
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The Fund is subject to a number of risks that may affect the value of its shares. This section provides additional information about the Fund’s principal risks. The degree to which a risk applies to the Fund varies according to its investment allocation. Each investor should review the complete description of the principal risks before investing in the Fund. As with investing in other securities whose prices increase and decrease in market value, you may lose money by investing in the Fund.
Cannabis-Related Company Risk. Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a cannabis-related company’s ability to secure financing, (ii) impact the market for marijuana industry sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis-related companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.
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Holdings and allocations are subject to risks and to change.
The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.