Summary: In this guide, we explore the 3 best weed ETFs that can unlock potential returns in the flourishing cannabis market. The most convenient way to invest in these ETFs is through a reputable brokerage platform like Interactive Brokers.
Best Platform for Worldwide Stock Trading & Investing
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Highly trusted multi-asset broker with clients in over 200 countries
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Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
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Low commissions starting at $0 with no platform fees or account minimums
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Easily fund your account and trade assets in 26 currencies
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IBKR pays up to 4.58% interest on cash balances of $10k or more
What are weed ETFs?
Weed ETFs (exchange-traded funds) are investment funds that pool together various cannabis-related assets such as stocks, bonds, or derivatives. Investing in a weed ETF provides you with exposure to the broader cannabis market, spreading the risk across multiple companies. This makes it an attractive option for those looking to capitalize on the growth of the cannabis industry without the volatility associated with individual stocks.
3 best weed ETFs to invest in this year
After conducting thorough research, we’ve come up with the 3 best weed ETFs that you should keep an eye on this year. They include:
- ETFMG Alternative Harvest (NYSE Arca: MJ);
- AdvisorShares Pure US Cannabis ETF (NYSE Arca: MSOS);
- Global X Cannabis ETF (NASDAQ: POTX).
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
If you’re looking to dive deeper into specific companies within the cannabis industry, check out our guides on these weed stocks:
- How to Buy Green Thumb Industries Stock;
- How to Buy MariMed Stock;
- How to Buy Organigram Stock;
- How to Buy TerrAscend Stock.
ETFMG Alternative Harvest (MJ)
One of the pioneering cannabis-focused ETFs, the ETFMG Alternative Harvest ETF offers investors a diverse portfolio of global cannabis companies. With holdings ranging from cultivation and pharmaceuticals to real estate, this weed ETF aims to capture the full spectrum of the cannabis market. As of 2024, it remains a prominent choice for investors seeking comprehensive exposure to the evolving cannabis industry.
ETFMG Alternative Harvest price today
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AdvisorShares Pure US Cannabis ETF (MSOS)
Focused exclusively on U.S. cannabis companies, the AdvisorShares Pure US Cannabis ETF is designed to provide investors with targeted exposure to the growing American cannabis market. It includes companies involved in cultivation, extraction, and distribution, making it a strategic choice for those who believe in the potential of the U.S. cannabis sector. Hence, keep an eye on this weed ETF if you’re interested in a more specialized approach.
AdvisorShares Pure US Cannabis ETF price today
Your capital is at risk.
Global X Cannabis ETF (POTX)
For those looking for a globally diversified cannabis ETF, the Global X Cannabis ETF is a compelling option. It comprises companies engaged in various aspects of the cannabis industry, including cultivation, extraction, and ancillary services. Furthermore, by offering exposure to both domestic and international cannabis markets, this weed ETF aims to provide a balanced and diversified investment approach for investors seeking broad cannabis industry representation.
Global X Cannabis ETF price today
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Where to buy weed ETFs?
Buying weed ETFs is a straightforward process. Investors can purchase these funds through various brokerage platforms. Nevertheless, our go-to broker for investing in weed ETFs is Interactive Brokers, a widely popular platform with many useful features, such as:
- Low commissions and financing rates to maximize returns;
- Global access to stocks, futures, bonds, and funds;
- Trading efficiency with advanced technology;
- Secure trading experience.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
Pros and cons of investing in weed ETFs
Pros
- Diversification: Weed ETFs provide exposure to a diversified portfolio of cannabis-related assets, therefore, reducing the risk associated with individual stock investments;
- Convenience: Investing in weed ETFs is convenient and cost-effective, offering an easy entry point for investors seeking exposure to the cannabis industry without the complexities of individual stock selection;
- Industry growth potential: As the cannabis industry continues to expand, weed ETFs offer investors an opportunity to capitalize on the sector’s growth without the need for extensive market research.
Cons
- Market volatility: Like any investment, weed ETFs are subject to market fluctuations. The cannabis industry is still evolving, and factors such as regulatory changes can impact the performance of these funds;
- Dependency on legislative changes: The cannabis industry is heavily influenced by legal and regulatory developments. Changes in government policies can, therefore, significantly impact the performance of weed ETFs, making them susceptible to political uncertainties;
- Company-specific risks: While weed ETFs aim to diversify risk, they are still influenced by the performance of the underlying companies. Hence, poor financial performance or other issues affecting a major holding can impact the overall value of the ETF.
If you’re looking for other investment opportunities in the pharmaceutical and alternative medicine industry, feel free to check out these guides:
- How to Buy Psychedelic Stocks;
- 5 Best Biotech Stocks;
- 5 Best Pharma Stocks;
- 5 Best Insurance Stocks;
- 3 Best Marijuana Penny Stocks;
- 3 Best Weed Stocks That Pay Dividends.
Common mistakes to avoid when investing in weed ETFs
One of the most common investing mistakes that you should be wary of when investing in weed ETFs is not doing your research. You should, instead, understand the holdings, the fund’s strategy, and the potential risks before anything. Nevertheless, it’s not the only pitfall to avoid. You should also keep an eye on:
- Ignoring regulatory environment: Stay informed about the legal and regulatory landscape of the cannabis industry. Changes in regulations can have a significant impact on the performance of weed ETFs;
- Overlooking fees and expenses: Be mindful of the fees associated with weed ETFs. High expense ratios can eat into your returns over time, so compare fees before making investment decisions;
- Neglecting portfolio diversification: While weed ETFs offer diversification, it’s essential to consider how they fit into your overall investment portfolio. So, avoid overconcentration in a single sector.
- Fear of missing out (FOMO): Making impulsive decisions driven by the fear of missing out on potential gains can result in uninformed choices and heightened risks. It’s, therefore, crucial to prioritize thorough research and base investment decisions on careful analysis instead of giving in to FOMO.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about weed ETFs
Is there an ETF for weed?
Yes, there are several ETFs focused on the cannabis industry. Some notable examples include ETFMG Alternative Harvest, AdvisorShares Pure US Cannabis ETF, and Global X Cannabis ETF. These ETFs provide investors with diversified exposure to companies involved in various aspects of the growing cannabis market.
Are weed ETFs a risky investment?
Like any investment, weed ETFs carry some level of risk. The thing is—the cannabis industry is still evolving, and factors such as regulatory changes and market volatility can impact their performance.
What are the best weed ETFs currently?
As of now, some of the best weed ETFs to consider include ETFMG Alternative Harvest, AdvisorShares Pure US Cannabis ETF, and Global X Cannabis ETF. These funds offer diversified exposure to the cannabis industry and cater to various investment preferences.
Can I buy weed ETFs through any brokerage platform?
Yes, most online brokerage platforms offer access to a variety of ETFs, including those focused on the cannabis sector. Our go-to broker for investing in weed ETFs is Interactive Brokers.
How do I choose the right weed ETF for me?
Consider your investment goals, risk tolerance, and preferences when selecting a weed ETF. Also, review the fund’s holdings, strategy, and fees to make an informed decision.
