How to Invest in Marijuana Stocks With Stash

Petey Wheatstraw 6846 Views 0 Comments cannabis stocks, M1 Finance, Marijuana Stocks, Pot Stocks, Stash, Webull 5 min read

Investing in Marijuana stocks with Stash 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 and with the right platform.

We’ve already shown you 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, but the platform is also 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, Commission Free trading apps such as Webull, M1Finace, Robinhood and Stash are currently your best options for investing in the newly emerging cannabis market without the hassles of commission fees.

Robinhood, M1Finace and Webull offer the opportunity to trade over 5,000 securities within their apps, which includes most U.S. equities and exchange-traded funds (ETFs) that are listed on major U.S. exchanges. But as of right now, these apps don’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. Unfortunately, most of the most valued cannabis stocks reside in the Canadian market. This makes it nearly impossible for savvy investors to find individual cannabis stocks poised for big returns.

Stash, it should be noted, 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.

However, Stash does offer newbie investors the ability to cash in on cannabis investments, and actively promotes user’s ability to do so. 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 you can buy the same cannabis ETFs on other online brokers such as Robinhood, M1Finance, or Webull— so if Stash is not your preference you easily create your own pot-centric portfolio with other commission-free platforms. One highly understated benefit of investing in either the Stash, Robinhood, or M1 Finance platform is that they allow you to invest in fractional shares. What this means is that you don’t need to drop $3100 to buy a share of Amazon. You can spend, for example, $20 and own a “fraction” of that share.

You should also keep in mind 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 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.

What this all means is Corporate Cannabis is considered a very risky investment. If you invest in Marijuana stocks with Stash they 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.

If you are interested in purchasing individual pot stocks, I would stray from some of the more well-known, more volatile ones floating around (Aurora Cannabis we’re side-eyeing at you). After some due diligence, I have found one that I feel comfortable adding to my investment portfolio. Grow Generation (GRWG) owns and operates retail hydroponic and organic gardening stores in the United States, and has been poised to be a leading supplier to cannabis growers if and when cannabis becomes legal in the United States.