MSOS: 1st Quarter 2025 Portfolio Review
Portfolio
PERFORMANCE
MSOS experienced a difficult first quarter of 2025, with its net asset value (NAV) declining -31.13% and market price falling -31.40%. The losses reflect continued headwinds in the U.S. cannabis sector, where regulatory stagnation at the federal level remains a major drag on investor sentiment and sector momentum.
PORTFOLIO
MSOS remains committed to a concentrated investment strategy, with its top five multi-state operators (MSOs) consistently making up the bulk of the portfolio. As of Q1 2025, these holdings accounted for 81.06% of the fund:
- Q1 2024: 83.11%
- Q2 2024: 83.53%
- Q3 2024: 82.86%
- Q4 2024: 84.46%
- Q1 2025: 81.06%
This strategic concentration reflects the fund’s conviction in the long-term potential of the largest U.S. cannabis operators despite short-term volatility and regulatory setbacks.
POSITIONS
MSOS continued to optimize weightings across existing holdings but did not initiate any new positions during the quarter. One notable development involved the completed merger of Cansortium Inc. (TIUM.U) with RIV Capital Inc. (RIV). Following the merger, the combined entity was renamed FLUENT Corp. (CNTMF) as of February 5, 2025.
WINNERS & LOSERS
While most holdings declined, a few smaller positions posted gains:
- Gold Flora Corp. (GRAM): +52.00%
- Vapen MJ Ventures Corp. (VEXTF): +10.52%
- 4Front Ventures (FFNTF): +3.70%
However, these stocks trade at low prices and represent a small fraction of the portfolio.
Core holdings posted steeper declines:
- Green Thumb Industries (GTBIF): -28.89%
- Trulieve Cannabis Corp. (TCNNF): -25.53%
- Curaleaf Holdings Inc. (CRLBF): -41.67%
- Verano Holdings (VRNOF): -47.81%
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| GTBIF | GREEN THUMB INDUSTRIES SWAP | 32.73% |
| TCNNF | TRULIEVE CANNABIS CORP | 20.54% |
| CURLF | CURALEAF HOLDINGS INC | 13.71% |
| CRLBF | CRESCO LABS INC-SUBORDIN | 7.46% |
| GLASF | GLASS HOUSE BRANDS INC | 6.62% |
| VRNOF | VERANO HOLDINGS CORP SWAP | 5.87% |
| TSNDF | TERRASCEND CORP | 5.62% |
| JUSHF | JUSHI HOLDINGS INC SWAP | 1.97% |
| PLNH | PLANET 13 HOLDINGS INC | 1.16% |
| VREOF | VIREO GROWTH INC COM SWAP | 0.91% |
As of 3.31.2025. 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
The U.S. cannabis industry faced further political and regulatory delays in Q1. Notably, the much-anticipated update on cannabis rescheduling—expected within 90 days of the DEA’s January 21, 2025 hearing—did not occur. The hearing itself was postponed by DEA Administrative Law Judge John Mulrooney, pushing the process back with no definite timeframe.
This delay has exacerbated investor frustration, especially amid allegations from industry groups that the DEA may be colluding with prohibitionist organizations and deliberately undermining its own proposed reclassification. Legal challenges were filed by groups including Village Farms International, Hemp for Victory, and The Office of the Cannabis Ombudsman (OCO).
STATE-LEVEL PROGRESS
Despite federal gridlock, momentum continues at the state level. Key U.S. cannabis companies—including Trulieve, Verano, Curaleaf, Ayr Wellness, and Cresco Labs—have contributed to a legalization campaign in Florida, where adult-use cannabis may again appear on the November ballot. Additional adult-use legalization bills were proposed in Indiana, Kansas, Kentucky, Mississippi, New Hampshire, Tennessee, Texas, West Virginia, and Wisconsin. As of March 31, 2025, 24 states have legalized cannabis for adult use.
FEDERAL LEGISLATION
Two significant cannabis bills were reintroduced in mid-April:
| EATURE | STATES 2.0 ACT | PREPARE ACT |
| Primary Focus | Immediate protection for state-legal cannabis activities | Strategic planning for future federal regulation |
| Federal Enforcement | Limits federal interference in compliant states | Maintains current federal prohibition during study phase |
| Regulatory Oversight | Assigns roles to FDA and TTB | Proposes development of a new regulatory framework |
| Interstate Commerce | Permits between legal states | Not addressed |
| Equity and Social Justice | Not explicitly addressed | Central to commission’s mandate |
| Implementation Timeline | Immediate upon enactment | Commission reports within one year |
These legislative efforts signal continued engagement from federal lawmakers, though timelines remain uncertain.
OUTLOOK
While MSOS endured a tough quarter, the long-term outlook for the U.S. cannabis sector remains intact. Public support for legalization continues to grow, and industry stakeholders are more coordinated than ever in their advocacy. Though progress may be slower than expected, efforts at both the state and federal level are laying the groundwork for eventual breakthroughs. As 2025 unfolds, investors will be closely watching rescheduling developments, ballot initiatives, and how cannabis companies continue to adapt and lead through this transitional period.
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To get updates on the funds, tune in to AdvisorShares’ AlphaNooner Show streaming live each regular weekday starting at 12:00 pm (East Coast time), where I am a guest almost every Tuesday. Other important guests from the cannabis world often join too. Find it on most major social media platforms or visit our the AdvisorShares “Events” webpage for more information.
Cheers,Past Commentary
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus or summary prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
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.
Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.
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.