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How to invest in cannabis stocks
Weed stocks to watch if you're looking to invest in the Canadian cannabis boom.
Only 5 years ago, few investors took cannabis stocks seriously. Today, as billions of dollars pour into the sector, the cannabis industry has cemented itself as one big disruptor in the investment world.
If you’re looking to invest in cannabis stocks, you can start here. Below is a list of companies that have exposure to the marijuana sector and are listed on US stock exchanges.
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Listed cannabis sector stocks
Note: The above lists may not be fully representative of the Canadian or global marijuana marketplace, and some companies may not directly deal in cannabis but have cannabis exposure.
Why invest in cannabis stocks?
In the last couple of years, governments the world over have become less stringent on the use and production of marijuana and hemp products, paving the way for an explosion of new businesses.
A year after Canada became the second country to legalize recreational marijuana in 2018, the legal cannabis sector was estimated to be worth $150 billion, according to Euromonitor International. Between then and 2025, they predict the sector will grow by 2,000% globally.
How to invest in cannabis
There’s more than one way to invest in the cannabis industry.
- US-listed cannabis stocks. This means buying the stocks of global cannabis companies or companies that have cannabis exposure, including CBD companies, that are listed on US stock exchanges. Here are some of the biggest:
- Canopy Growth (CGC)
- GW Pharmaceuticals (GWPH)
- Cronos Group (CRON)
- Aurora Cannabis (ACB)
- Tilray (TLRY)
- Aphria (APHA)
- International cannabis stocks. Additional big-name marijuana companies are listed on stock exchanges in Canada, other countries or over-the-counter exchanges. It’s possible to invest in these if you use a broker that offers global or OTC stocks.
- Curaleaf (OTC:CURLF)
- Green Thumb Industries (OTC:GTBIF)
- Trulieve Cannabis (OTC:TCNNF)
- Cannabis ETFs. ETFs contain a bundle of stocks, usually hundreds, and these often track an index of stocks. There are a handful of cannabis ETFs listed in the US.
- ETFMG Alternative Harvest (MJ)
- The Cannabis ETF (THCX)
- Cambria Cannabis ETF (TOKE)
- AdvisorShares Pure Cannabis ETF (YOLO)
- Horizons Marijuana Life Sciences (OTC:HMLSF or TSX:HMMJ)
How do I buy cannabis stocks?
- Choose a stock trading platform. If you’re a beginner, our table below can help you choose.
- Open your account. You’ll need your ID, bank details and Social Insurance Number.
- Confirm your payment details. You’ll generally need to fund your account with a bank transfer.
- Find the stocks you want to buy. Search the platform and buy shares of the companies or ETFs you like. It’s that simple.
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Marijuana products
While smoking weed is perhaps the most well-known use of cannabis, there are many types of businesses that are set to benefit from the growing sector. Legalization of many of these products is new and in some cases, still underway. These include the following:
- Medicinal products. Medicinal cannabis is used for the treatment of cancer pain, epilepsy, palliative care, chemotherapy nausea, neuropathic pain, anorexia and neurological conditions. Cannabidiol, also known as CBD, is a derivative of the marijuana plant that’s become increasingly popular for medical uses in recent years.
- Science and research. Scientific study of marijuana has accelerated in recent years with the discovery of many other beneficial compounds besides the psychoactive THC.
- Recreational use. Marijuana as a recreational drug is legal in Canada but still restricted in some states and the U.S. federal government. However, legalization is starting to occur in parts of the United States.
- Food products. Hemp is used as an ingredient in a range of products, including cooking oils, snacks, protein powder, cooking flour and more. The sale of food products made from hemp seeds was authorized by the 2018 Farm Bill.
- Building materials. Hemp is used in insulation and building construction materials and has several names, including hempcrete, hemp masonry and hemplime.
- Clothing. Hemp is broadly recognized as one of the most sustainable materials available in the manufacture of clothing.
- Beauty products. Hemp is commonly used in various health and beauty products, such as moisturizers, lip balm, makeup and skin oils.
Marijuana vs. hemp
Unlike marijuana, hemp does not have psychoactive properties. While hemp and marijuana come from the same cannabis plant, hemp has a lower component of the psychoactive THC — which means it gives no users a feeling of “getting high”. Typically, hemp is used in food products, building materials and textiles while marijuana is used for medicinal and recreational purposes.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Bottom line
The legal cannabis sector is getting more mature each year, and there are a number of ways to invest in cannabis. But keep in mind that past performance is not a guarantee of profit and all investments come with inherent risks.
Explore your investment options across trading platforms and commodities before you buy.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
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