Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How to invest in cannabis stocks
Pot stocks to watch if you're looking to invest in the cannabis boom.
Just five years ago, few investors took cannabis stocks seriously. Today, as billions of dollars pour into the sector, few doubt that cannabis will be one of the next big disruptors. If you’re looking to invest in the cannabis boom, you can start here.
Compare online brokers to trade cannabis stocks, ETFs and CFDs
Why invest in cannabis?
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.
In October 2020, New Zealanders voted on a referendum regarding recreational cannabis. The majority of voters 50.7% were against the proposed Cannabis Legalisation and Control Bill, while 48. 4% were for it.
A year after Canada became the second country to legalise 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 cannabis.
- Cannabis stocks. This means buying stocks on the share markets in cannabis companies or companies that have cannabis exposure. In New Zealand, we have just one company, Cannasouth, floated on the NZX.
- International cannabis stocks. Some of the biggest cannabis companies are listed on stock exchanges in overseas markets such as the US or Canada. It’s possible to invest in these if you use a broker that offers global stocks. Click on the ‘global’ list above to see some of these stocks.
- Cannabis ETFs. ETFs contain a bundle of stocks, usually hundreds, and these often track an index of stocks. There are around six cannabis ETFs listed in the US.
- CFD trading. You can trade cannabis stocks, ETFs or indices using CFDs. CFDs are contracts that allow you to make money on the price movements of an underlying asset, such as a share or commodity. Warning – these are complex products best suited to experienced traders.
How do I buy cannabis stocks?
- Choose a share trading platform.
- Open your account.
- Confirm your payment details.
- Find the shares you want to buy.
Cannabis 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. In other countries, legalisation of many of these products is still new and in some cases, still underway. These include the following:
- Medicinal products. Currently, medicinal cannabis is used in New Zealand for the treatment of the terminally ill and in the management of multiple sclerosis.
- Science and research. Recent policy changes mean that cannabis may be cultivated for medicinal reasons in New Zealand.
- Recreational use. Marijuana as a recreational drug is still illegal or restricted in most countries and in some cases carries serious punishment. However, legalisation is starting to occur in parts of the US and in all of Canada. It’s consumed to achieve feelings of relaxation or euphoria – but, there are also many risky side effects.
- 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 hemp food products in New Zealand was legalised in 2018.
- Building materials. Hemp is used in insulation and building construction materials and has several names, for example, hempcrete.
- Clothing. Hemp is broadly recognised as one of the most sustainable materials available in the manufacturing of clothing.
- Beauty products. Hemp is commonly used in various health and beauty products, such as moisturisers, lip balm, makeup and skin oils.
Marijuana vs Hemp
Unlike marijuana, hemp is not normally a narcotic. While hemp and marijuana come from the same cannabis plant, hemp has a lower component of the psychoactive THC – which means that it has no psychoactive effects. Typically, hemp is used in food products, building materials and textiles while marijuana is used for medicinal and recreational purposes.More guides on Finder
-
How to buy Credit Suisse Group (CS) shares
Steps to owning and managing Credit Suisse Group, with 24-hour and historical pricing before you buy.
-
The rise of fin-fluencers: 44% of gen Z investors get money tips on social media
Social media is the number 1 source of investing advice among young adults in New Zealand, according to new research from Finder.
-
How to invest in the Porsche IPO from New Zealand
Everything we know about the upcoming Porsche IPO, plus information on how to buy in.
-
Share trading statistics New Zealand
Find out how Kiwis are investing their money, why they choose to invest and why many are still reluctant with our share trading statistics.
-
How to buy AMTD Digital (HKD) shares
Steps to owning and managing AMTD Digital Inc., with 24-hour and historical pricing before you buy.
-
The best stock trading apps in NZ (2023)
An overview of the best investing apps available in NZ, including pros, cons and fees.
-
How to invest money in New Zealand in 2023
What’s the best way to invest money in New Zealand? Find out about KiwiSaver, index funds, cryptocurrency and more in this guide.
-
BlackBull Markets share trading review
Your detailed review of share trading with BlackBull Markets, including brokerage fees, safety, pros and cons, and more.
-
Jarden Direct Share Trading review
Thinking of trading shares with Jarden Direct? Check out our review of Jarden Direct fees, safety, and pros and cons first.
Ask an Expert