Amplify Alternative Harvest ETF

MJ

Market cap $201M

Amplify Alternative Harvest ETF has a history of underperformance and recent gains driven by speculative cannabis sector optimism. MJ's portfolio is concentrated in both U.S. MSOs and Canadian LPs, with heavy exposure to stocks currently rated Sell or Strong Sell. Despite recent outperformance versus peers, MJ's index construction and lack of ancillary exposure make it unattractive compared to alternatives like CNBS.

Amplify Alternative Harvest ETF is my top cannabis ETF pick due to its diversification and positive response to rescheduling headlines. I expect President Trump to leverage cannabis rescheduling for midterm election gains, which should boost MJ and other cannabis ETFs in the near term. MSOS is downgraded to sell due to high concentration risk, while CNBS is rated a hold because of its reliance on swaps and high expense ratio.

Cannabis ETF spent the first half of the year in the performance doldrums. But they have rallied of late on news that the Trump administration is open to reclassifying marijuana as a less dangerous drug.

Cannabis stocks and ETFs like Amplify Alternative Harvest ETF and AdvisorShares Pure US Cannabis ETF are surging on speculation that President Trump will reclassify marijuana as a Schedule III drug. Rescheduling would reduce regulatory and banking risks, potentially unlocking new capital and investor interest, but both ETFs carry high fees and concentration risks. MJ is preferred over MSOS for its greater diversification, though both face challenges from high expense ratios and reliance on swaps.

Cannabis stocks rallied on a Wall Street Journal report that President Donald Trump is contemplating reclassifying weed as having a lower danger level. Such a move would be "a gamechanger" for the industry, one investing chief said.

Cannabis legalization is inevitable, driven by shifting political, generational, and fiscal dynamics, especially as Republicans seek votes and tax revenue. Despite high risks, the upside for cannabis ETFs like MJ and MSOS is compelling, making them suitable for risk capital allocations. Demographic trends and bipartisan support suggest federal decriminalization is only a matter of time, further boosting the industry's long-term prospects.

When markets move, we can learn a lot from the outperformers. But we can also learn a lot from the underperformers — and maybe even find opportunities.

CHICAGO, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Amplify ETFs announces the realignment of its cannabis ETFs to provide investors with dynamic exposure to the cannabis industry. On January 28, 2025, the Amplify Seymour Cannabis ETF (CNBS) will change its investment policy to invest in securities of U.S. companies engaged in cannabis and hemp-related activities.

GOP presidential nominee Donald Trump supports Schedule III classification for cannabis, which has already been proposed by the Biden administration.

President Joe Biden is probably recording his best chances of winning as yet in swing states (per Bloomberg), even after his apparent debate loss.