Buying marijuana stocks is easy, and it’s a 100% legal way to invest in one of the fastest growing industries in the world.
A mere $1,000 investment in TLRY (a popular marijuana stock) in August of 2018 would be worth well over $7,000 today. There aren’t many stocks besides marijuana stocks that yield a 700% return in 6 months.
Based on data gathered in 2018, legal marijuana sales jumped by over 36% to well over $30 billion dollars. Needless to say, early investments in marijuana stocks have resulted in enormous gains. Here’s the inside scoop on how you can get in on the action.
1 Minute Summary
- You need an online low-cost broker to buy marijuana stocks that permits OTC stock trading
- Marijuana stocks have recently declined, providing a perfect buying opportunity for new investors
Ally Invest is the best broker to buy marijuana stocks in 2019
- There are no inactivity or maintenance fees with any Ally Invest or Ally Bank accounts
- Consider buying a marijuana ETF to invest in a wide range of other marijuana companies and diversify
- MJ (a marijuana ETF) and TLRY (a popular marijuana stock) are two great investments to start
Why Buy Marijuana Stocks?
In this world, we need money. Working a regular 9-to-5 job will never make you rich. No matter how much W2 income you save, it’s impossible to stockpile an outsized sum of cash.
Investing is one of the only ways to do this – period. Nearly all of the world’s wealthiest people have earned their fortunes through investment income, not through salaries.
Step #1: Opening an Account
The first thing you’ll have to do before you can invest in marijuana stocks is open an online brokerage account.
All stock and ETF trades start at just $3.95. Plus, every Ally client gets access to robust trading platforms and 24/7 customer service, and Ally never charges any inactivity or maintenance fees.
Step #2: Making the Trades
Once your account is opened (takes 5 mins), the next step is to navigate to the “Trade” tab on Ally’s online trading platform.
For this example, we’re going to use MJ, which is a popular marijuana ETF that invests in a dozen small start-up marijuana companies. ETFs are wise investments because they provide diversification. When you invest in an ETF, you can invest in multiple companies at once. Sometimes this is better than investing in one particular stock.
After your account is opened, the screenshot below shows what Ally’s mobile trading platform looks like. All you have to do is type in the ticker symbol, “MJ” into the the “Symbol” box. Once you hit “Search” or click the blue arrow, you’ll see real-time prices and see buttons to buy and sell. Using the “Trade” feature on Ally’s app, you’ll be able to select the number of shares and the price you want to buy the shares at.
This order is for 10 shares at a limit price of $40.40, which requires $404.00 in cash to make the investment. Note, you’ll be prompted to preview the order before you submit it in the market, which gives you an opportunity to double check that everything (like the number of shares you want to buy) is correct.
We always prefer to use limit orders, because you get to decide what price you want to buy or sell at. A market order will execute your order at the current market price. This is sort of like buying a house without looking at the offering price; for stocks, market orders are only useful if you don’t care about the short-term price movements and just want to buy the stock. After submitting your order, you’ll receive a confirmation of your purchase and you’ll be a legal marijuana investor!
If you want to sell your investment and close out your position, all you have to do is click on your position in your Ally account and click “sell”. Of course, if you need help with anything in this process, customer service is ready to help you 24/7.
List of 10 Popular Marijuana Stocks to Invest In
MJNA is one of the most popular marijuana stocks to buy, but here are some other startup marijuana stocks that you should take a look at.
(IMPORTANT: We do NOT receive any compensation from the companies on this list. These are just popular marijuana stocks to invest in.)
|Company||Stock Ticker||Med or Rec|
|GreenGro Technologies, Inc.||GNRH||Both|
|Cannabis Science, Inc.||CBIS||Med|
|American Cannabis Company, Inc.||AMMJ||Both|
|United Cannabis Corporation||CNAB||Med|
|CannaGrow Holdings, Inc||CGRW||Rec|
|Cannabics Pharmaceuticals Inc.||CNBX||Med|
|Rocky Mountain High Brands, Inc.||RMHB||Rec|
|PotNetwork Holding, Inc.||POTN||Both|
|Medical Marijuana, Inc.||MJNA||Both|
Tips for Success
Buying individual stocks is great, especially in the marijuana sector, but often it can be wise to diversify and buy a basket of stocks. A really easy way to do this is with an ETF (exchange traded fund) called ETFMG Alternative Harvest ETF (ticker symbol “MJ”).
MJ is a global ETF. Canada and the United States resemble roughly 75% of the ETF’s holdings, while the remaining 25% of MJ’s holdings are overseas cannabis companies. Depending on your view of how/if more legalization of marijuana will take place over the coming years, a global ETF can certainly be seen as a boon. As legal marijuana sales increase, so will public interest and public investment, so investing in a global marijuana company makes sense.
Although it’s impossible to tell which way an investment will move, given that marijuana just became legal in California and Nevada in 2018, it doesn’t seem unreasonable to think the entire industry is just getting started. MJ provides exposure to over a dozen marijuana companies, and is an excellent place to start.
About Opening a Brokerage Account
Opening an Account
What You’ll Need
Final Thoughts on Investing in Marijuana
Before you buy marijuana stocks and start investing in the marijuana industry, you should know that investing is always considered somewhat risky.
As with any investment, there is the possibility that the value could go down. However, because there is heightened risk with buying small marijuana stocks, there is more reward. Massive companies like Apple and Google physically have less room to grow (their stock prices are already so expensive), because they are already so well-known and owned by so many investors.
Since marijuana literally became recreationally legal this year for one of the most populated states in the US (California), recreational and medical marijuana companies are perfectly positioned for massive growth.
Investing in marijuana stocks right now is like investing in alcohol companies after prohibition ended in the early 1930s.
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Updated: March 8, 2019