Trump’s Rescheduling of Marijuana Is a Spark for Top Marijuana ETFs

Key Points

• The Trump administration has moved marijuana from Schedule I to Schedule III for FDA-approved and state-regulated medical products, providing a major long-term tailwind for the industry.
• While the announcement sparked a short-term rally—including a 33% jump in the North American Cannabis Index—the full impact on company revenues will likely be gradual as broader changes await a June 29 administrative hearing.
• Investors looking to capitalize on highly discounted shares can look to the Amplify Alternative Harvest ETF for global exposure and dividends, or the AdvisorShares Pure US Cannabis ETF for a concentrated, higher-momentum play on the U.S. market.

After amassing enormous losses over the past five years, cannabis stocks received a much-needed shot in the arm last week when President Donald Trump announced plans to officially reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA).

The April 23 announcement comes on the heels of Trump’s April 18 executive order seeking to increase funding and accelerate research for the use of psilocybin and other psychedelics as medical treatments for serious mental illnesses.

While investors may question the sustainability of the recent rally in pot stocks after some of the industry’s biggest names experienced +90% losses over the past five years, for speculative investors looking for a buy-low opportunity, two exchange-traded funds (ETFs) can provide broad exposure at bargain bin prices.

Conditional Marijuana Rescheduling Is a Slow-Burning Catalyst

While the news served as a short-term tailwind for cannabis stocks, long-term, it could take some time to impact the top lines of companies that have positioned themselves to capitalize on state-level medical and recreational decriminalization.

According to the U.S. Department of Justice, the agency—in cooperation with the Drug Enforcement Administration—issued an order immediately placing both U.S. Food and Drug Administration (FDA)-approved products containing marijuana as well as marijuana products regulated by state medical marijuana licenses in Schedule III of the CSA.

However, that does not include the rescheduling of broader marijuana products, and specifically for recreational use. That will depend on an administrative hearing scheduled for June 29, which aims to “provide a timely and legally compliant pathway to evaluate broader changes to marijuana’s status under federal law.”

Regardless, the move to immediately reschedule FDA-approved products and state-regulated products has been long-awaited. The drug was added to Schedule I in October 1970 during President Richard Nixon’s first term, and the move by the Trump administration serves as a massive, long-term tailwind in the making.

The market reacted accordingly. From its one-month low on March 30 to its one-month high on April 22, the North American Cannabis Index (NTR) gained more than 33%. For two of the largest ETFs in the space, those gains were even more magnified, demonstrating the upside potential that a rebound in cannabis stocks could carry.

A Basket of Pot Stocks Harvesting Global Gains

During the same time that the NTR index was rising in anticipation of cannabis’ rescheduling, the Amplify Alternative Harvest ETF NYSEARCA: MJ gained 44%.

The passively managed fund seeks to track the Prime Alternative Harvest Index, which includes global companies engaged in the legal cultivation, production, and distribution of cannabis and related products, as well as ancillary industries.

Notably, the ETF remains down in 2026, with a year-to-date (YTD) loss of more than 6%. But prior to March 30, that loss exceeded 31%, with its Q1 performance suggesting that more of the troubles that plagued the fund over the past five years—amounting to a loss of more than 89%—were in store.

Shares are still trading well below their 52-week high of $46.75, but it appears that MJ’s holdings are turning a corner.

Institutional inflows have marginally outpaced outflows over the past year, though they remain well below 2024 highs. But for speculative investors, the ETF pays for patience.

The MJ’s dividend currently yields 2.12%, or 59 cents per share annually.

A Cannabis ETF With a Domestic Twist

Narrower in scope, the AdvisorShares Pure US Cannabis ETF NYSEARCA: MSOS, which launched on Sept. 1, 2020, is an actively managed ETF that mostly invests in the stocks of U.S.-based cannabis and hemp companies.

As a result, the fund’s 62% gain from March 30 to April 22 outpaced both the NTR index and the Amplify Alternative Harvest ETF over the same period.

That has helped the fund break above even in 2026 with a YTD gain of more than 7%. But like MJ, the MSOS has suffered enormous losses over the past five years, totaling more than 88%.

However, over the past 12 months, the ETF has seen institutional buyers more than double the number of sellers, with inflows surpassing outflows for three consecutive quarters. Meanwhile, short interest in the MSOS—while still notable at 5.94%—has steadily declined from its record high in December 2025.

Prospective investors should be mindful of the fund’s relatively high expense ratio of 0.77%. And unlike the Amplify Alternative Harvest ETF, the MSOS does not pay a dividend. However, with its singular focus on the U.S.-based cannabis and hemp industry, its has the potential to produce outsized gains based on the momentum provided by the Trump administration’s rescheduling of marijuana.