This Cannabis ETF Is Gaining Strong Momentum - And Trump's Policy Shift Is The Big Reason Why

The Roundhill Cannabis ETF (BATS:WEED) has posted a dramatic surge in technical strength, with its momentum ranking jumping to the 89th percentile this week amid renewed optimism for federal cannabis reform.

Surging Momentum Scores

According to the Benzinga Edge’s data, the Roundhill ETF's momentum score hit 89.25, a percentile ranking that places it well ahead of many industry peers. For context, other major players in the sector have lagged; Aurora Cannabis Inc. (NASDAQ:ACB), for example, currently holds a momentum score of just 21.25.

This marks a significant shift from previous periods, as investors rally around President Donald Trump's recent executive order urging the rescheduling of marijuana.

This momentum metric is critical for traders, as it measures a stock or ETF’s relative strength based on price movement patterns and volatility over multiple timeframes. The score indicates that the ETF is outperforming a vast majority of the market in terms of recent price action, signaling strong investor confidence.

Mixed Long-Term Signals

Despite the short-term momentum explosion, the technical picture remains nuanced. While the ETF shows positive trends over the short and long terms, the medium-term trend—covering the last couple of quarters—remains negative, as per the Benzinga Edge’s Stock Rankings.

Dan Ahrens, portfolio manager of the AdvisorShares Pure US Cannabis ETF (NYSE:MSOS), cautioned that while the news is positive, the sector remains volatile and investors should expect a “multi-leg process” rather than an overnight fix.

Policy Catalyst Driving The Trend

The primary driver behind this technical breakout is the changing regulatory landscape. President Trump's push to move cannabis to Schedule 3 is viewed as the “most consequential federal cannabis policy shift” in 50 years.

Currently, cannabis operators are taxed under Section 280E, a rule designed for “narcotics traffickers” that prevents them from deducting standard business expenses like rent or payroll.

A move to Schedule 3 would eliminate this burden, instantly transforming the profitability of U.S. operators.

WEED ETF Struggles In 2026 Despite Stellar Rally

WEED has declined by 4.72% in 2026 so far. However, it was higher by 61.50% over the last six months and 26.17% over the past year.

On Tuesday, the ETF closed 5.23% lower at $19.38 apiece.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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