Three letters are taking the marijuana sector by storm.
They are M-S-O.
MSO stands for Multi-State Operator.
Shares of MSOs have done well over the last few months, but they have largely tracked the rest of the marijuana stock sector.
Today they passed a major breakout point and the leading MSOs adding hundreds of millions of dollars in value.
If it continues, there will be literally billions of dollars to be made in the next few days, weeks, and months.
Here’s the basics of MSO marijuana companies and how to get your piece of the action.
What Is A Multi-State Operator (MSO)?
Although there is no exact technical definition, an MSO is usually taken to mean a marijuana company with operations in multiple states.
The largest MSOs have vertically-integrated operations in multiple states where some form of marijuana (medicinal use and/or recreational use) has been legalized.
A large MSO will include marijuana cultivation, wholesaling, and distribution through its own retail locations.
What Are The Biggest MSOs?
The biggest MSOs are found operating in states with large and growing legal marijuana markets.
MSOs will have a big footprint with multiple retail outlets in the states with the largest population like New York and California. They will also have a handful of stores in smaller population states where marijuana use was only recently legalized like Missouri and New Jersey.
The largest MSOs include:
Acreage Holdings (CAN:ACRG.U / USA:ACRGF) – Up 2.5%
Cresco Labs (CAN:CL / USA:CRLBF) – Up 10.4% today
Curaleaf (CAN:CURA / USA:CURLF) – Up 30% today
Why Are MSO Stocks Moving Up So Fast?
MSO stocks are so hot because the market has realized the largest prize in all of marijuana will be the United States.
And the United States marijuana industry is going to boom for years to come.
Now, we all know marijuana is still illegal at the federal level in the United States. But the odds of a crackdown on the multi-billion legal marijuana industries in individual states are declining every day.
Basically, the genie is out of the proverbial bottle and it’s not going back in.
The large MSOs are rapidly expanding in states which have legalized marijuana and they’re going to be in ideal position when marijuana is legalized at the federal level.
Should I Buy An MSO Stock?
This is the multi-billion dollar question.
MSO stocks are on fire at the moment which puts us in a bit of a tough situation.
But with every situation, there’s a solution.
Here is The Seed Investor’s for MSOs.
In the short-term, MSOs are worth a quick trade.
For example, Curaleaf jumping 30% today on the news that it opened its 23rd dispensary in Florida is an incredibly strong sign.
There’s definitely some quick money on the table, why not take it?
In the long-term, MSOs are buys too.
However, it’s a far better move to wait out and build positions when these stocks aren’t so hot.
The Seed Investor previously featured Acreage Holdings back when it first started trading on the Canadian Securities Exchange.
It was the most highly touted marijuana IPO of the year, but we advised against jumping in too soon.
We advised picking them up around “C$15 or C$16” a share.
It took a month for the IPO hype to fade, but when it did, Acreage Holdings fell to our buy range.
Within a month it was 50% higher.
The same opportunity will surely come along again with the big MSOs.
For now, if you’re looking for maximum long-term capital appreciation, definitely look at marijuana stocks with US operations for the long-term, but stick to those which haven’t run so much.