MSOS Did Crash

When I wrote about MSOS here on 10/19, I explained why it was plunging. It had closed at $4.76 on 10/17, and today it closed at $3.16, down 33.6%. MSOS is now down 17.1% in 2025 after collapsing last year. The New Cannabis Ventures Global Cannabis Stock Index, which closed today at 5.91, is down 14.1%, which is down less than MSOS.

Why MSOS Is Crashing

MSOS started running up when Q3 began. Looking at it since 6/30, it has increased a lot, even after the sharp pullback recently:

Too many people got too excited, and now a lot of time has passed since 8/11, when Trump pointed to potential rescheduling. More than three months has passed, and there is no news. Plus, the industry has continued to face challenges (pricing pressure, competition, etc.).

How Low It Could Go

Here is the chart over the past two years:

There was a gap left after the elections last November that was never filled, though some of the largest MSOs did close the gaps. If you believe that gaps get filled, then you can expect a rally potentially, as a gap was left behind last Friday up to $3.98. The all-time low of $2.02 was set in April. It's hard to predict the price of this ETF. Remember, it is loaded with three stocks: Curaleaf (CURLF), Green Thumb Industries (GTBIF) and Trulieve (TCNNF). I am quite negative on CURLF and TCNNF, and their weight could push the ETF much lower. Again, it really matters what happens with 280E taxation. For now, we have a double-bottom and a gap above. Perhaps the lows will hold.

How To Invest In Cannabis Now

A month ago, I disclosed three stocks here that I like better than MSOS, and they are all down, though some have declined less than MSOS:

I also suggested two cannabis REITs, though I didn't name them. They were and still are Chicago Atlantic Real Estate Finance (REFI) and Innovative Industrial Properties (IIPR). Since that last article, they are both down, though less of a decline than MSOS.

Here is my current model portfolio:

I have reduced cash from the maximum of 20%, though it is still quite high. The index has a Biotech name, a THC beverage name and a Canadian retailer, but I have none. Here is how my model portfolio compares to the index for the other sectors:

I like my MSOs more than the MSOs in the index, and I like my Canadian LPs more than the Canadian LPs in the index, but I do not really like the MSOs generally. I am slightly overweight relative to the index, and I really like Green Thumb Industries due to its strong balance sheet. You can read more about my views in this article published on Sunday at Seeking Alpha about why I upgraded it to Strong Buy. Verano (VRNO) is riskier, but it sure is cheap. Here is a chart of the action for the MSOs that are in the GCSI now since the elections in November 2024:

They are all down, and MSOS has dropped 54.2%.They are cheap and very beaten up, but they are risky in my view.

The Canadian LPs are not as cheap but are less risky. Same with the REITs.

Conclusion

I remain very negative on MSOS. Part of my concern is that it has massive exposure to to stocks that I think could fall a lot, and their entire focus is on a risky area. If 280E taxation remains, it will be terrible for the companies. So, MSOS remains way up from its lows and way down from its recent highs. I think that there are much better ideas than this ETF.