Individual marijuana stocks tend to get most of the attention, but marijuana ETFs — which let you invest in multiple companies across the industry’s verticals, from product development to consumption — may be a better fit for some investors.
For example, by purchasing a share of the AdvisorShares Pure US Cannabis ETF (MSOS), the largest cannabis ETF by assets under management, you gain exposure to companies across the marijuana industry, including Curaleaf, Trulieve Cannabis Corp., Green Thumb Industries, Verano, Glass House Brands and Cresco Labs.
Marijuana ETFs also help spread risk across multiple companies and segments, rather than concentrating it in a single stock. This approach, known as diversification, is a core investing principle and is especially important in a relatively new and volatile sector like cannabis, where headlines can send stocks soaring — or cause their collapse. Most recently, the Justice Department announced a new rule that moves FDA-approved medical marijuana and that which is sold in a state where it's legal from a Schedule I drug to a Schedule III drug. As would be expected, this was a boon to pot stocks across the industry, as you'll see in the table below.
Best-performing marijuana ETFs
Below are the cannabis ETFs available to U.S. investors (excluding the over-the-counter market) with positive returns as of July 2026.
The best-performing cannabis ETF by one-year return is Roundhill Cannabis ETF (WEED), which is up 116.50%. | ||||
|---|---|---|---|---|
Ticker | Company | Performance (Year) | ||
WEED | Roundhill Cannabis ETF | 116.50% | ||
MSOS | AdvisorShares Pure US Cannabis ETF | 108.54% | ||
CNBS | Amplify Seymour Cannabis ETF | 87.27% | ||
YOLO | AdvisorShares Pure Cannabis ETF | 48.50% | ||
MJ | Amplify Alternative Harvest ETF | 40.25% | ||
Source: Finviz. Data is current as of July 1, 2026, and is intended for informational purposes only. | ||||
Marijuana ETFs vs. stocks
There are hundreds of cannabis stocks to choose from, many of them risky penny stocks or stocks of companies with extremely small market capitalizations. Given the industry’s young age, there’s ample room for shakeouts that could significantly affect a stock’s price. There will likely be many losers, and it’s hard to predict how many potential winners there will be. The current state of the industry makes an already risky strategy — picking individual stocks — even riskier.
Marijuana ETFs still come with considerable risk, but you’ll at least broaden your exposure to dozens of companies. If one company in the fund fails, ideally those losses will be offset by another company’s success. It’s true that you could miss out on the sky-high returns of an individual breakout stock, but investing in ETFs could help you avoid the significant losses investors are likely to see in such an unproven industry.
» Need a brokerage account? Here are the best brokers for ETFs
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So, are marijuana ETFs still risky?
Investing in cannabis — including cannabis ETFs — still comes with considerable risk. While regulatory risk appears to be a lesser concern these days, the sheer unpredictability in business models and operations of such a young industry could significantly and quickly alter the future landscape and, in turn, the value of marijuana stocks and ETFs.
Regulation
While recreational marijuana consumption and possession are now legal in several states (and medical marijuana is legal in even more), in the eyes of the federal government, it’s still an illegal substance. The recent shift from Schedule I to Schedule III will open up more avenues for medical research and commercialization, but it stops short of full, federal recreational legalization.
Financing and banking
While the earliest dispensaries and marijuana businesses may have struggled to secure traditional financing and banking services, that isn’t as much of a concern today, and further change could be on the horizon.
The Secure and Fair Enforcement Regulation Banking Act was reintroduced in the House in 2023 but has still not been passed into law. If it becomes law (and the latest news from the Justice Department could signal more urgency to move on the proposed legislation), it would help protect depository institutions that supply financial services to marijuana companies.
The number of depository institutions providing banking services to marijuana companies has certainly increased over the years. Still, many of these developments aren't yet concrete, and the full landscape is still being formed.
Volatility
If you’re a new investor or are looking for predictability, there are other index funds and ETFs better suited for you. But if you’re willing to stomach the volatility of an uncertain market in exchange for getting in at an extremely early stage — and your portfolio is in a well-diversified, healthy state — you may have a case for investing in cannabis ETFs.
Learn more about sector ETFs:
Neither the author nor editor held positions in the aforementioned investments at the time of publication.
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