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Oct 8, 2019

A Beginner’s Guide to Investing in the Legal Cannabis Industry

By Stash Team

Get all the details on investing in marijuana and the cannabis industry legally.

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Legal cannabis is set to become a multi-billion dollar industry in less than a decade, but investors have only been able to invest in cannabis companies for just a few years. We have all the details about recreational and medical marijuana, not to mention explainers on CBD oil, hemp, and other marijuana products. Plus, we break down how to invest in the legal cannabis industry.

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Investing in the Legal Cannabis Industry

The Marijuana Business: What You Need to Know

The next gold rush could be green. As attitudes toward recreational cannabis use quickly change, the legal marijuana market is projected to grow into a $25 billion industry within the next three years. The industry is also expected to create hundreds of thousands of new U.S. jobs—although legal issues abound.

Corporate Cannabis: Investing in Marijuana on Stash

Did you know you can invest in many of the companies creating the legal cannabis industry? Stash’s fund Corporate Cannabis tracks the Prime Alternative Harvest Index, which includes the stocks of 37 public and international companies. These marijuana companies are legally involved in the cultivation, distribution, or marketing of legal cannabis for medical or non-medical purposes. The fund also includes more traditional tobacco companies that aren’t actively involved in the cannabis space, but may one day be involved. Remember that there may be higher risks associated with this industry.

Podcast: Learn About the Business of Marijuana with David Rheins

In this episode of the Teach Me How to Money podcast, David Rheins, the founder and executive director of the Marijuana Business Association, tells us all about the promise and challenges of the marijuana industry. Nearly two-thirds of Americans say marijuana should be legal. However, at the federal level, the government and big banks are far from convinced that marijuana should be a financial force in America.

Find out more about cannabis

How to invest in the legal cannabis industry?

Stash allows you to invest in some of the leading legal cannabis companies through its Corporate Cannabis fund. The fund follows the Prime Alternative Harvest Index, which currently invests in 37 companies involved in the legal market.

What investments in cannabis-related companies does Stash offer?

Through the Corporate Cannabis ETF, Stash allows you to invest in companies including Aurora Cannabis, Canopy Growth, Cronos Group, Green Organic, Tilray, and others. Stash also offers Aurora Cannabis, Canopy Growth, Cronos Group, and Tilray as single stocks.

What is the marijuana industry worth?

According to some, the cannabis industry worldwide could be worth nearly $60 billion in less than a decade. Of course, this depends on a lot of different factors and is not a sure thing.

Is investing in companies involved in medical marijuana safe?

Investing in legal cannabis stocks, whether recreational or medical, can carry more risks than other stocks. In general, marijuana-related stocks can be volatile, meaning share prices can move up or down quickly. These stocks are some of the most volatile on Stash, and there is also some talk of pot stocks being in a market bubble. Remember: Investing in the stock market can always involve losing money.

What cannabis stocks pay dividends?

As a general rule, younger companies don’t pay dividends, because they need any excess cash to fund growth. The small number of publicly-traded cannabis companies are part of an emerging industry. Some larger companies tangentially related to the cannabis industry—for example, companies that provide growing or other equipment—may pay dividends. You can learn about whether a company has paid dividends in the past by doing some research.

What marijuana stocks are on the NASDAQ?

Some of the leading cannabis companies that trade on the NASDAQ, and that are also listed as holdings in the Corporate Cannabis ETF, include Arena Pharmaceuticals, Cronos Group,  GW Pharmaceuticals, Tilray, and Zynerba Pharmaceuticals.


Written by

Stash Team


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