Three outperforming cannabis ETFs offer investors exposure to equities that have rebounded 15% in recent months as President Biden moved to pardon federal cannabis offenses, New York State issued its first recreational dispensary licenses and voters in Missouri and Maryland brought to 21 the number of states where weed is legal.

ETFMG Alternative Harvest ETF, AdvisorShares Pure US Cannabis ETF, and ETFMG U.S. Alternative Harvest provide exposure to companies that cultivate, distribute, and sell cannabis and related products. The ETFs have beaten the Global Cannabis Stock Index, which lost more than two-thirds of its value in the past year, though they lag the 14% drop in the S&P 500 Index as of Nov. 18, 2022.

Five cannabis ETFs trade in the United States, excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM).

While prohibited as an illegal substance in many parts of the world, cannabis is gaining wider acceptance for both medicinal and recreational purposes. Support for legalization is growing, and cannabis is now a multibillion-dollar industry. The global legal cannabis market is expected to expand at a healthy compound annual growth rate (CAGR) of 25.5% through 2030.

We examine the three top cannabis ETFs below based on their stock performance over the past year.

ETFMG Alternative Harvest ETF (MJ)

• Performance Over One Year: -58.0%
• Expense Ratio: 0.75%
• Annual Dividend Yield: 1.56%
• Three-Month Average Daily Volume: 1,227,992
• Assets Under Management: $416.7 million
• Inception Date: Dec. 3, 2015
• Issuer: ETFMG

ETFMG Alternative Harvest ETF is the first exchange traded fund to focus on the global cannabis industry and tracks the Prime Alternative Harvest Index, which is comprised of companies that grow, market, and sell cannabis products for medicinal and recreational use. The fund is dominated by Canadian cannabis companies.

Its top holdings include the ETFMG U.S. Alternative Harvest ETF (MJUS), which owns cannabis stocks; SNDL Inc. (SNDL), a Canadian company that distributes and sells cannabis products; and Canopy Growth Corp. (WEED), a Canadian company that sells recreational and medicinal products. The holdings data are as of Nov. 19.

AdvisorShares Pure US Cannabis ETF (MSOS)

• Performance Over One Year: -58.7%
• Expense Ratio: 0.80%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 2,072,595
• Assets Under Management: $780.6 million
• Inception Date: Sept. 1, 2020
• Issuer: AdvisorShares

AdvisorShares Pure US Cannabis ETF is an actively managed fund that focuses U.S. cannabis and cannabis-related companies, including multi-state operators (MSOs) involved in diverse parts of the industry. The fund seeks long-term capital appreciation and its investments may include real estate investment trusts (REITs), healthcare, hydroponics, and pharmaceuticals.

The ETF's top three holdings are Green Thumb Industries Inc. (GBTIF), which supplies cannabis products to retail stores; Curaleaf Holdings Inc. (CURLF), which sells cannabis products and offers professional services such as property leasing; and Trulieve Cannabis Corp. (TCNNF), which is a vertically integrated producer and retailer of products. The holdings data are as of Nov. 18.

ETFMG U.S. Alternative Harvest ETF (MJUS)

• Performance Over One-Year: -59.5%
• Expense Ratio: 0.75%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 589,302
• Assets Under Management: $117.1 million
• Inception Date: May 12, 2021
• Issuer: ETFMG

ETFMG U.S. Alternative Harvest ETF is an actively managed fund that provides exposure to companies directly involved in the production of cannabis-related products in the U.S. Companies selected for the fund must get at least 50% of their net revenue from the cannabis business.

The top three holdings are Innovative Industrial Properties Inc. (IIPR), a REIT focused on the cannabis industry, as well as Curaleaf Holdings Inc. and Green Thumb Industries Inc. These data are as of as of Nov. 19.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.