Stash App: Invest In Legal Pot, Make Money

Investing in the legal marijuana industry is a hot topic, with the sector projected to be worth $72 billion by 2030. However, despite the potential for high growth, the industry is still in its infancy, and investing in marijuana stocks comes with a high degree of risk. For those looking to invest, Stash is a platform that offers a \$5 minimum investment and a Corporate Cannabis fund that follows the Prime Alternative Harvest Index, currently investing in 37 companies in the legal market. Stash also offers individual stocks from leading cannabis companies such as Aurora Cannabis, Canopy Growth, and Tilray. It is important to remember that the legal status of marijuana varies across different states and countries, and this can impact the performance of stocks.

Investing in cannabis stocks is risky

• Volatility and Uncertainty: The cannabis industry is relatively new and highly volatile, with stock prices that can fluctuate significantly. It is subject to changing market conditions, and there is a possibility of losing money.
• Legal and Political Risks: In the US, the sale of marijuana remains illegal at the federal level, and banks face severe restrictions when dealing with marijuana-related businesses. This makes it difficult for cannabis companies to access financial services, and there is no guarantee that federal legalization will occur.
• Speculative Nature: Marijuana stocks are considered speculative investments due to the industry's infancy and the fact that the product is still a Schedule 1 drug federally. This means that there is a higher risk of loss, and investors should only allocate funds they are willing to lose.
• Scams and Fraud: The popularity of cannabis stocks has attracted scam artists and fraudulent activities. Investors should be cautious of potential investment fraud, such as unlicensed sellers or promises of guaranteed returns, and market manipulation tactics like fake press releases.
• Foreign Stocks and Limited Data: Many cannabis stocks trading in the US are Canadian, and investing in foreign stocks comes with additional risks. There may be limited access to financial data, research, and company reports, and there could be no legal recourse in cases of fraudulent investments.
• Limited Access to Financial Services: Due to the federal illegality of marijuana, many financial institutions and investment professionals are reluctant to engage with the industry. This may hinder your ability to obtain advice or services from certain advisors or portfolio managers.
• Over-the-Counter (OTC) Stock Risks: Many cannabis companies trade on OTC markets, which means they are not required to regularly disclose financial statements or maintain minimum market capitalizations. This can result in low liquidity and difficult trading, and it may be challenging to assess the risk of these stocks.
• Financial Constraints and Dilution: Many cannabis companies are unprofitable and face financial constraints. They often raise capital by issuing new shares, diluting the value of existing shares. Even with dilution, these companies may still struggle to obtain sufficient capital to operate successfully.
• Immature Industry and Enforcement Threats: The cannabis industry is still in its early stages, and any changes in federal or state regulations could significantly impact the market. Enforcement threats or shifts in government policies can cause pot prices to soar or plummet.

Stash's Corporate Cannabis fund

One of the key advantages of investing in Stash's Corporate Cannabis fund is the ability to diversify your portfolio across multiple cannabis-related businesses. By investing in the fund, you are not limited to a single stock but instead, gain exposure to a basket of companies operating in the legal cannabis space. This diversification can help reduce the risk associated with investing in a single company, as it spreads your investment across multiple entities.

Another benefit of the Corporate Cannabis fund is that it provides access to a range of companies involved in different aspects of the cannabis industry. This includes companies focused on cultivation and distribution, as well as those developing medical applications and cannabis-derived products. By investing in the fund, you can capture a broader range of opportunities within the cannabis sector.

It is important to note that investing in the cannabis industry carries certain risks. As the industry is still relatively new and subject to changing regulations, it is considered highly volatile and speculative. However, Stash's Corporate Cannabis fund provides a way to invest in a diversified manner, helping to mitigate some of these risks.

Additionally, Stash offers a user-friendly platform that guides investors through the process of building an ETF portfolio. With a low minimum investment requirement of $5 and affordable fees, Stash makes investing in the Corporate Cannabis fund accessible to a wide range of investors.

Cannabis stocks on Robinhood, M1 Finance, and Webull

Robinhood is a top trading platform for listed stocks, including those from the marijuana industry. However, the direct unavailability of over-the-counter (OTC) stocks is a key challenge for cannabis stock traders on the platform. OTC cannabis stocks like Trulieve and Curaleaf are not listed on major exchanges like NASDAQ and NYSE, so investors cannot trade them directly via Robinhood. On the other hand, stocks like Canopy Growth and Aurora Cannabis are fully tradable on Robinhood. Robinhood traders will also be unable to benefit directly from U.S. multi-state operators due to federal restrictions governing marijuana in the U.S.

Some of the top cannabis stocks on Robinhood include Sundial Growers, Hexo Corp, and OrganiGram Holdings. Sundial Growers, currently priced at around $1.39, has the potential to swiftly quadruple your investment. Hexo Corp, a producer and distributor of branded cannabis products, is also relatively low-priced. OrganiGram Holdings, with a market cap of just over $700 million, is a relatively small marijuana company with a stock price that won't be a barrier to entry for millennial traders.

M1 Finance users have discussed cannabis stocks on Reddit, with one user sharing a portfolio of pot stocks that includes Canopy Growth Corporation (CGC), Tilray, and Innovative Industrial Properties (IIPR). Other suggestions for cannabis stocks to buy via M1 Finance include Tilray, Cronos Group, Aurora Cannabis, and Aphria.

On Webull, users can trade Canopy Growth and ETFs like the Roundhill Cannabis ETF.

Cannabis stocks are volatile

An important metric to consider when evaluating stock volatility is "beta," which measures how a stock's price moves relative to the broader market, often the S&P 500. The beta values of some cannabis stocks, such as HEXO, CannTrust Holdings, and Canopy Growth, indicate that they are significantly more volatile than the S&P 500. For example, HEXO's share price has experienced monthly moves more than quadruple that of the S&P 500 over the past three years.

The volatile nature of cannabis stocks can be attributed to various factors, including regulatory changes, supply issues, and company-specific news. For instance, the announcement of physical dispensary rollouts in Canada and the delayed launch of derivatives products impacted HEXO's share price. Similarly, CannTrust Holdings' admission of growing unlicensed marijuana resulted in the suspension of its cultivation and sales licenses, causing significant price fluctuations.

Cannabis stocks are also sensitive to new developments and analyst opinions, which can result in substantial price swings. For example, the approval of a bill to legalize marijuana federally in the US triggered a frenzy in pot stocks, with Canopy Growth experiencing an 18% jump in its share price. Conversely, negative analyst comments or short-seller reports can lead to significant losses, as seen with Aurora Cannabis following a comment from an analyst at GLJ Research.

Overall, the cannabis industry's dynamic nature and the sensitivity of cannabis stocks to various factors contribute to their volatility. Investors considering this sector should be aware of the potential for significant gains but also be prepared for substantial losses. It is crucial to carefully assess the risks and conduct thorough research before investing in cannabis stocks.

Cannabis stocks and federal law

Cannabis stocks have been racking up solid gains in the last year, despite the fact that companies in the sector are yet to report positive earnings. The legal cannabis industry is projected to grow into a $25 billion industry within the next three years and is expected to create hundreds of thousands of new jobs in the US. However, cannabis is still classified as a Schedule 1 drug under the Controlled Substances Act at the federal level, which means that its production and distribution for recreational use is prohibited by federal authorities.

The federal legalization of cannabis is important for the industry's growth. The US is the largest market for cannabis, accounting for 90% of the $9.5 billion trade in 2017. That dominance is expected to continue, with the cannabis market projected to grow to $47.3 billion in 2027. The recreational use of cannabis, which is more lucrative and easier to get into than medical cannabis, is expected to drive future sales in the US.

The absence of federal legalization creates problems for cannabis entrepreneurs, who face limited access to traditional funding sources. Banks refuse to lend to cannabis businesses due to federal legislation, and even the Federal Drug Administration (FDA) has approved very few products containing cannabidiol (CBD), a non-psychoactive agent used in medicines derived from the cannabis plant. This regulatory uncertainty has led US companies interested in the cannabis market to list their shares on Canadian stock exchanges.

The lack of federal legalization also inhibits the flow of investment capital into the industry. Typically, venture capitalists and private equity investors provide funds to emerging industries, but they have been hesitant to enter the cannabis industry due to the social stigma attached to it. As a result, cannabis entrepreneurs have had to rely on raising capital from friends and family. Federal legalization could unleash a wave of new entrepreneurs interested in the space but currently unable to start businesses due to a lack of funding.

In addition, the absence of federal legalization has the potential to cause supply issues by limiting the amount of land available for cannabis cultivation. The Controlled Substances Act restricts the amount of land that farmers can devote to growing cannabis, constraining supply and inhibiting the growth of the market.

The biggest impact of federal legalization would be the streamlining of the market for cannabis production in the US. Currently, the market is dominated by small to mid-sized businesses that lack access to funding and economies of scale to transform the industry with innovative products and branding. Federal legalization could open the doors for small businesses to pursue ambitious growth plans or allow large multinational companies with ample expertise and funds to enter the market. They could invest in research and marketing and drive down prices, making cannabis more accessible to consumers.

While the potential upside of the cannabis industry is significant, it is important to remember that investing in cannabis stocks carries a high level of risk. Cannabis stocks are highly volatile, and federal legalization efforts are progressing slower than expected. In addition, cannabis stocks are subject to unique legal and political risks, as well as financial constraints due to federal prohibition. Therefore, it is crucial for investors to carefully consider these risks and conduct thorough due diligence before investing in the cannabis industry.

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