Investing in Marijuana stocks is a one-way trip down speculation street, but it can lead to some very modest returns, granted you go about it the right way.
We’ve already discussed how investing on the Robinhood platform, a commission-free trading app that offers a vast range of different stock options that can be traded without enduring the costly fees of a stockbroker is your best option for investing as a newbie. Not only do they provide stellar advice, the platform is intuitive and easy to navigate, something that is crucial for a first-time investor not looking to be overwhelmed with a fluctuating rainbow of stock prices.
Regarding Marijuana stocks, Robinhood and Stash are currently your best options for investing in the newly emerging cannabis market without the hassles of commission fees.
Currently, Robinhood offers the opportunity to trade over 5,000 securities within the app, which includes most U.S. equities and exchange trade funds (ETFs) that are listed on major U.S. exchanges. But as of right now, the app doesn’t offer the ability to trade over-the-counter (OTC) stocks (e.g. non-NASDAQ and NYSE) or foreign stocks, which poses an obstacle for cannabis investors.
Stash, on the other hand, doesn’t manage investor accounts directly, but rather helps guide investors through the process of building an ETF portfolio. The service has a $5 minimum investment and charges $1 a month for account balances under $5,000 and a 0.25% annual fee for accounts with $5,000 or more.
What sets Stash apart is that it has just offered newbie investors the ability to cash in on cannabis investments. These investments combine legal cannabis cultivation, distribution, and medical applications with big tobacco stocks to focus on the benefits global cannabis acceptance may bring.
Keep in mind, however, that cannabis resides in a young, highly volatile, highly speculative market. Maneuvers by the feds or state governments can send pot prices soaring–or plummeting, depending on many factors. As with all investments, you should only invest what you are willing to lose. You should try and capture those businesses that are poised to be around for the long run, so some knowledge of trends within the industry is helpful.
As such, cannabis companies and companies involved in selling cannabis products may have limited access to banks, and may never be allowed to sell their products entirely legally in the U.S., and in other countries where cannabis is also illegal, according to Morningstar and the fund’s prospectus. Companies that produce tobacco also face heightened regulatory controls.
Corporate Cannabis is considered a risky investment. Stash will send you an overexposure warning, urging you to diversify, if you invest more than $100 in Corporate Cannabis, and that amount represents more than 10% of your portfolio.
If you are curious about investing in cannabis on the Stash platform click this link for $5 to automatically get you started. That’s a free $5 you can invest immediately in one of the more comprehensive cannabis ETF’s out there. According to the Stash newsletter:
The first exchange-traded fund (ETF) for legal cannabis, created by ETF Managers Group, officially launched on December 26, 2017. Trading under the ticker MJX, it tracks the Prime Alternative Harvest Index, which includes the stock of 30 public companies internationally that are “engaged in the legal cultivation of cannabis, or the legal production, marketing or distribution of cannabis products for medical or non-medical purposes,” according to the fund prospectus.
You can read more about their investment profile here.
My name is Petey Wheatstraw, also known as Charles Stevens. I’m an avid marijuana smoker, writer, devoted father and non-profit minion– not necessarily in that order. A Chicago native I’ve lived off and on in the Bay Area since 1996. Seven years ago I finally settled here to capture the changing face of our communities.