In recent years, the global cannabis industry has grown significantly. This growth has drawn many investors looking to add a different type of stock to their portfolios. Most aim to profit from the market, especially by buying marijuana stocks.
With growth in the sector, investors anticipate more favorable U.S. regulations, transforming the regulatory landscape. As a result, investing in cannabis stocks has become a viable option. Traders and investors will be happy to know that publicly traded cannabis companies are beginning to list their stocks on major stock exchanges.
The initial step for investing in marijuana stocks involves selecting a suitable broker. We advise using a broker that is generally affordable. To assist in your search, this article reviews and focuses on the best brokers for cannabis stock investments in 2024.
Investing in the Cannabis Stock Market
Market insights and analysis predict a 14.95% annual growth rate (AGR) for the global cannabis market from 2023 to 2028. By 2028, this market is expected to reach $102.90 billion. The U.S. cannabis market will play a vital role in this growth, underscoring the vast potential of the U.S. marijuana sector.
Investors are beginning to eye the cannabis market’s volatility for significant returns on investment (ROI). This interest will see the industry continue to grow, which is a welcome step following the cooling period that happened after the surge in 2021.
Currently, many cannabis companies face struggles as their share values have dropped considerably. The decreased demand for marijuana-infused products has led to lower stock prices, with the situation dampening interest from both retail and institutional investors. They now view pot stocks as highly volatile.
Experts note the complex legal landscape as a factor in the market’s challenges. In the U.S., federal and state laws on marijuana use and consumption conflict. Despite these challenges, marijuana stock brokers must comply with these laws. This compliance is crucial to avoid legal issues and makes the market more accessible for offering online cannabis stock brokerage services.
Key Features to Look Out For in a Cannabis Stock Broker
For someone new to the industry, finding a stock broker that offers marijuana stocks may be challenging. We came up with this section to provide you with the key features you need to look out for when selecting an online brokerage that will provide you marijuana stocks that matches your investment preference.
Ease of Use
The first and most important feature a marijuana stock broker must have is usability. From creating a brokerage account to depositing funds and buying stocks, users should be able to navigate the platform easily. In other words, beginners and experienced stock investors shouldn’t have an issue using such brokers.
Fees
You should have an estimate of the percentage of your investments that will go to brokerage fees before choosing a stock broker. Some brokers charge a small premium, while others levy commissions on their customers. Look out for relatively affordable stock brokers, especially if you’re a beginner with limited capital.
Research Tools
Stock brokers come in various forms, but the best options have research tools for users to get more market insights and leverage the data for their investment needs. For instance, some brokers offer charting tools and resources for fundamental and technical analysis.
Additionally, the best cannabis stock brokers offer educational resources to help beginners get the hang of how they work and the general stock market.
Customer Support
The best stock brokerages employ dedicated customer support teams. These professionals assist investors with platform use issues and provide answers to various questions from investors. We recommend choosing a broker that offers 24/7 support and quick response times.
Top Brokers for Cannabis Stocks in 2024
Now that you know what to look out for before choosing a cannabis stockbroking platform, we highlight the best brokers for cannabis stock investments that make our list. Our selection was based on the key features above.
Charles Schwab
Based on the key features we reviewed hundreds of brokers, with Charles Schwab making it to the top of our list as the best online brokers for trading cannabis stock. Speaking of stocks, both experts and novices favor Charles Schwab because it is a visually appealing broker that provides commission-free stock and ETF trading on US marketplaces.
Schwab is highly regarded for its comprehensive research options, which includes equity ratings, insights and opinions from leading research firms in the industry. The brokerage goes beyond that by providing a user-friendly web-based platform for trading cannabis stocks, and a desktop platform tailored for active traders.
In terms of flaws, Charles Swchab does not provide cryptocurrency and forex trading. However, with all things considered, Charles Schwab remains the best option for investors looking to purchase marijuana stocks.
Interactive Brokers
Coming in at second place for the best broker to purchase pot stocks is Interactive Brokers (IBKR). It is a well-known multi-asset brokerage that offers access to international markets, including cannabis stock investments. IBKR is known for its comprehensive services at competitive prices. Clients can use a single account to trade bonds, stocks, options, futures, forex, and cryptocurrencies.
Having spent years at the top of the online brokerage industry, IBKR has developed into a platform that suits all types of traders. Their flagship IB Trader workstation is notable for providing extensive research, monitoring, and investment tools for the cannabis market.
One thing to note before signing up on IBKR is that the process of opening an account is time-consuming. However, the broker is an excellent choice for cost-effective trading and suits those who don’t mind the initial complexity of opening an account.
E*Trade
E*TRADE ranks third on our list of online brokers to offer cannabis investment. This broker offers a broad spectrum of trading instruments and its tools are accessible via its website, desktop application, and two mobile apps. These tools are especially useful for trading in the cannabis market. E*TRADE provides an educational section for new traders and also offers research tools for experienced traders to develop their strategies.
The E*TRADE platform presents a variety of investment vehicles that cut across several global markets. These vehicles include stocks, options, futures, and more. Long-term investors will appreciate the thousands of mutual funds available, while active stock and options traders benefit from the E*TRADE $0 online stock and ETF commissions.
However, traders should note some limitations. E*TRADE does not support forex trading, and its product offerings are limited to US markets. Additionally, the broker does not accept electronic wallets and bank cards.
Making an Informed Choice
Becoming a successful cannabis stock investor involves more than finding the right online brokerage. To become successful in this industry, it’s crucial to keep up with market trends and regulatory changes. These factors can affect investor sentiments and how the stock performs.
We advise you to choose a broker that meets your personal needs and preferences. For instance, beginners may find Interactive Brokers (IBKR) challenging, as it is tailored more towards experienced investors. Therefore, a beginner would want a more straightforward broker, such as E*Trade.
Diversifying your investment is also essential. For this, consider the Charles Schwab Global Account. It offers access to major international markets and various assets in one platform. This approach helps manage risks and counter the volatility of the marijuana stock market.
Remember, cannabis stock trading differs from investing. Trading means actively buying and selling stocks for short-term gains while investing focuses on long-term gains. You also need to understand that investing in pot stocks is not a quick-rich scheme, and returns might take time to materialize.
Final Thoughts
As you dive into the cannabis stock investment world, we’ve highlighted the importance of choosing the perfect stock broker and the necessary features that make the best online stock brokerages stand out from their competitors.
Don’t forget to streamline your search based on factors like fees, available tools & resources, usability, and customer support. More importantly, focus on your investment needs and goals to make the best choice.
However, the cannabis stock investing journey is a long one that requires enough patience and constant adjustments to current market realities. Remember to research from time to time and stay updated with market trends. You can also consider professional advice to make the most of your investment journey.
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Why You Can Trust The Marijuana Index
The information provided on Marijuana Index is solely for educational purposes. The selections presented here are the product of meticulous analysis by an experienced financial analyst. However, it’s crucial to remember that these choices may not universally fit every portfolio.
Before making any investment decisions, we strongly encourage you to conduct thorough research. This ensures that any potential investment aligns with your unique financial goals and risk tolerance.
As of the date this article was written, the author does not hold any positions in the stocks or ETFs mentioned.
We do not provide personalized financial advice, advisory services, or brokerage recommendations. Nor do we advocate for the purchase or sale of specific stocks or securities. Please be aware that performance information might have changed since publication, and past performance should not be seen as an indicator of future results.
Investing in cannabis stocks carries its own set of risks, reflective of the evolving legal landscapes and market volatility inherent in this industry. As an investor, it’s essential to be aware of these risks and consider them carefully in your decision-making process.
To understand more about our commitment, we encourage you to learn more about us. If you have more questions for our cannabis specialist editors, do not hesitate to contact us. You can also send us a tweet at @Marijuana_index. Stay updated with the latest cannabis news by subscribing to our Newsletter.
Tobi Opeyemi - Financial Writer
Tobi, a journalist and crypto writer since 2017, is renowned for his educational content in the digital currency realm. His journey includes a significant tenure with Stockbossup, an investment platform committed to enlightening the black community on financial matters. Before this, Tobi honed his skills as a copywriter at Turboxbt, a platform specializing in cryptocurrency trading. Notably, Tobi's insights are featured on Investopedia, where he contributes articles on a range of topics. He is also celebrated as one of the top web3 creators on LinkedIn, known for content that consistently drives engagement and sparks conversations in the industry. With a background in Pharmacy, he brings a unique perspective to his writing, especially in the Cannabis sector.
