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How to Buy Cannabis Stocks [2024] | Step-by-Step

How to buy cannabis stocks
Nemanja Curcic

Summary: Cannabis companies have begun attracting the attention of numerous investors as social stigma wanes and marijuana legalization gains traction, spurring the growth of the nascent cannabis market. This guide will explain how to buy cannabis stocks using a reputable investing service like eToro and Interactive Brokers.

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

What are cannabis stocks?

Cannabis stocks represent shares in publicly traded companies dedicated to growing, developing, producing, and distributing cannabis and marijuana-related consumer goods.

Until recently, publicly dealing with cannabis was not only unacceptable but also illegal. However, as social taboos about the psychedelic loosened their grip on society in the early 2010s, a wave of legalization swept through North America and the rest of the world. As more and more states legalized cannabis, the market expanded and brought new investment opportunities.

It has been far from a steady ride, however. As of 2024, cannabis investing remains a diverse and shifting landscape with ongoing legislative developments, fledgling strategic partnerships, and an accelerating market aiming toward profitability, sustainability, and greater social acceptance. Despite that, the predictions for the future are good, as all indicators show that the market will continue with its upward trajectory. 

Best cannabis stocks

The cannabis market is still in the making, and its constituents range from various young businesses to diversification efforts by the big brands. Certain cannabis companies focus on the research and development of new strains and innovative products for medical or recreational marijuana use, while others specialize in cultivation and distribution. As more states in the U.S. and the majority of the world legalize cannabis, the market is bound to get larger, and some companies will likely experience massive growth. 

Here are some prominent companies at the helm of the growing cannabis market:

For further investment opportunities in the cannabis market, consider the following guides:

Note

While the cannabis market shows great promise, you must learn the industry’s specific economic environment and market dynamics. Make sure to research your investment before committing to any decision.

How to buy cannabis stocks: step-by-step

Investors can purchase cannabis shares using a regulated broker, just like the stock of any other publicly traded company. Simply perform the following steps, and you can trade cannabis stocks within minutes:

Step 1: Choose a broker

To buy cannabis stocks, you have to obtain access to the stock market with a third-party brokerage service. The most straightforward option is an online investing platform.

To securely buy cannabis stocks, we recommend you consider:

  1. eToro
  • Commission-free stock and ETF trading; 
  • 2,000+ stocks from 17 exchanges;
  • Fractional shares available;
  • User-friendly platform.

Highly Rated Stock Trading & Investing Platform

  • Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

  • 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.

  • Copy top-performing traders in real time, automatically.

  • Regulated by financial authorities including FCA and FINRA.

2.8 Million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.
  1. Interactive Brokers (IBKR)
  • Commission-free stock trading;
  • Global stock-trading on 90+ market centers;
  • Fractional shares available;
  • Extra income on fully paid shares;
  • Lowest financing rates for margin accounts in the industry;
  • No account minimum.

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

Up to 4.58% interest on balance*

How to choose an online broker?

In this vital first step of the investing process, you need to choose an online brokerage. Consider basing your brokerage choice on the following factors:

  • Available assets: Confirm that the platform has access to your preferred cannabis stocks. However, check for other financial instruments as well, such as exchange-traded funds (ETFs), bonds, commodities, cryptocurrencies, or currencies;
  • Fees and commissions: Ensure that the platform has affordable and competitive rates;
  • Security: Verify that the broker upholds advanced security measures, like two-factor authentication (2FA), to protect the privacy of you and your portfolio; 
  • Regulatory compliance: The broker should be regulated by a reputable financial authority (like the Securities and Exchange Commission (SEC) in the US);
  • Deposit and withdrawal options: Make sure their deposit and withdrawal methods suit you and are inexpensive;
  • Fractional shares: Fractional share trading will allow you to buy stocks or ETFs based on the dollar amount. It is excellent for implementing a dollar-cost averaging (DCA) strategy or investing on a tight budget.

Step 2: Choose an investment

Understanding which cannabis stocks to buy takes a mix of diligent research, a grasp on the weed industry’s specifics, and applying some general investing advice. To have a more comfortable journey through the volatile cannabis stock market, consider the following tips:

  • Learn the cannabis market dynamics: Before jumping in, become familiar with the fundamental aspects of the weed sector;
  • Check the company’s product pipeline and portfolio: Research the selection of cannabis strains and consumer goods in the company’s portfolio. Some cannabis companies develop the end product from seeds and soil: consider making a financial check of these pipelines;
  • Assess company leadership and expertise: A company’s leadership can be decisive for its success. What is the management team’s track record? Partnerships with big brands looking for entrance into the cannabis sector can also be beneficial;
  • Analyze the company’s financial health: Investigate the company’s fundamentals. Does it have the capital to fund research and operations? Since many startups in the sector remain unprofitable, confirm whether they have plans for future funding, which could affect stock value; 
  • Monitor the regulatory landscape: Marijuana products circulate in a tightly regulated space. Keep track of the evolving legislature in the regions your preferred companies work in;
  • Estimate the market potential: Compare the market size against the impact of the company’s products. Compare its operations against competitors as well. Finally, get to know the big picture dynamics to ascertain the cannabis company’s potential positioning;
  • Diversify: To mitigate risks, invest in several different cannabis stocks rather than putting everything into one. This measure will put a cap on potential losses during unexpected downturns;
  • Keep posted on external factors: Public perception of cannabis, news coverage, and celebrity endorsements can pull stock prices in this sector in a specific direction. Staying updated can help you anticipate market reactions;
  • Define your investment strategy: Are you in it for the long run, trusting the sector’s potential, or seeking short-term gains? Your investing objective will define your stock choices and your response to market changes.

Step 3: Open and fund your account

After you have opted for a brokerage and decided which cannabis stocks you want to buy, proceed to open and verify your new account. The platform should email you precise instructions on how to do this within minutes.

Once you have verified your account, you should deposit funds into your account to get ready to buy cannabis stocks. Common funding methods include bank transfers, debit or credit cards, and transaction services like PayPal.

Step 4: Decide how much you want to invest

Designating your budget limits before purchasing cannabis shares is crucial for a successful investment. Overstepping the budget can lead to significant financial issues due to a spiraling debt. To secure a stable and safe investment, make sure you have done the following:

  • Paid off all high-interest debt, such as credit cards and personal loans;
  • Created an emergency fund that covers at least three months of daily life expenses.

Rembember

Never invest what you cannot afford to lose.

Step 5: Place your order and buy cannabis stocks

The next step is placing an order and purchasing the preferred company’s shares. Do the following: 

  • Step 1: Log into your account and find the desired ticker symbol (e.g., OGI for Organigram or CRON for Cronos);
  • Step 2: Type in the amount or the number of shares you wish to buy;
  • Step 3: Select the order type (market order or limit order) and place it;
  • Step 4: Confirm the trade order.

Step 6: Monitor and manage your investment

Investing in individual stocks requires regular management and monitoring. For better odds of success, you must also track the ongoing cannabis market trends and frequently update your information on the companies you invested in and the overall state of the cannabinoid sector. 

Remember

Keeping up-to-date with relevant information increases the success rate of your investment.

Common mistakes to avoid when buying cannabis stocks

Make sure to avoid these common investing mistakes:

  • Lack of research: Research the cannabis stocks in detail, along with the market state of the weed industry, before investing;
  • Lack of strategy: Set your goals before you spend any money;
  • Staking everything on one asset: Always diversify your portfolio;
  • Falling prey to scams: Avoid illegal platforms and suspicious deals;
  • Fear of missing out: If the numbers do not add up, do not make the investment: it is better to miss out than lose money.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about how to buy cannabis stocks

What cannabis stocks to buy now?

Prominent companies in the cannabis market include Green Thumb Industries, MariMed, Organigram, TerrAscend, Curaleaf, Verano, Aurora Cannabis, Trulieve Cannabis, Charlotte’s Web, Cronos, and Jazz Pharmaceuticals.

Where to buy cannabis stocks?

You can invest in cannabis stocks using a regulated online brokerage such as Interactive Brokers and eToro.

Will cannabis stocks ever go up?

While most cannabis companies struggled in 2023, many have expressed optimism for 2024, especially those operating in Canada. However, the cannabis market is still young, and gauging it for reliable predictions is difficult.

What is the best cannabis stock under $10?

Some of the best cannabis stocks under $10 in our opinion include Organigram Holdings (OGI), Curaleaf (CURLF), and Cronos (CRON).

How to buy cannabis stocks in the US?

To buy cannabis stocks in the US, you first need to register an account with an online investing platform. Once your account is set up and funded, you can proceed to search for and invest in cannabis stocks of companies listed on the stock exchanges.

How to buy cannabis stocks in Canada?

You can buy cannabis stocks in Canada just like any other publicly traded company. Simply register an account with a brokerage like Interactive Brokers, fund your newly created account, and trade for the desired shares.

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

Up to 4.58% interest on balance*

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