AdvisorShares Leveraged Cannabis ETF Gains from Schedule III Rescheduling
The DOJ reclassified cannabis to Schedule III under the Controlled Substances Act, removing Section 280E punitive tax hurdles and expanding institutional capital, research, and banking access. AdvisorShares ETFs, including the Pure US Cannabis fund and its MSOX leveraged vehicle, now operate under a normalized framework supporting over 400,000 industry workers.
1. Schedule III Reclassification
On April 23, the Department of Justice finalized cannabis’s reclassification from Schedule I to Schedule III under the Controlled Substances Act. This shift removes the industry from a policy gray area and permits relief from Section 280E punitive tax treatment while enabling expanded research, banking services, and institutional participation.
2. Impacts on AdvisorShares ETFs
AdvisorShares’ actively managed funds—including the Pure US Cannabis ETF and the MSOX leveraged vehicle—now operate within a fully regulated framework. The change is expected to lower tax burdens for fund holdings, attract institutional capital, and drive higher trading volume in MSOX’s day-trading strategy.
3. Industry Outlook and Next Steps
The reclassification affects more than 400,000 U.S. cannabis employees who previously faced banking restrictions and financing hurdles. Many market participants view this as the foundation for further reforms like improved banking access, clearer regulatory oversight, and normalized valuations across multi-state operators.