How to invest in cannabis

Pot stocks to watch if you're looking to invest in the cannabis boom from Australia.

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Just five years ago, few investors took cannabis stocks seriously. Today, as billions of dollars pour into the sector, few doubt that cannabis will be one of the next big disruptors.

If you're looking to invest in the cannabis boom from Australia, you can start here. Below is a list of companies that have exposure to the cannabis sector and are listed on the Australian Securities Exchange (ASX). Click to the next tab for a list of global cannabis stocks.

Listed cannabis sector stocks


Note: The global cannabis list refers to the EQM Global Cannabis Index at the time of writing. This is a general guide only and should not be taken as investment advice. The above lists may not be fully representative of the Australian or global cannabis marketplace and some companies may not directly deal in cannabis but have cannabis exposure.

Why invest in cannabis?

In the last couple of years, governments the world over have become less stringent on the use and production of marijuana and hemp products, paving the way for an explosion of new businesses.

A year after Canada became the second country to legalise recreational marijuana in 2018, the legal cannabis sector was estimated to be worth $150 billion, according to Euromonitor International. Between then and 2025, they predict the sector will grow by 2,000% globally.

How to invest in cannabis

There’s more than one way to invest in cannabis.

  • Australian cannabis stocks. This means buying stocks on the Australian share market in cannabis companies or companies that have cannabis exposure.
  • International cannabis stocks. Some of the biggest cannabis companies are listed on stock exchanges in overseas markets such as the US or Canada. It’s possible to invest in these if you use a broker that offers global stocks. Click on the "global" list above to see some of these stocks.
  • Cannabis ETFs. ETFs contain a bundle of stocks, usually hundreds, and these often track an index of stocks. There are around six cannabis ETFs listed in the US; to date, there are no ASX-listed cannabis ETFs.
  • CFD trading. You can trade cannabis stocks, ETFs or indices using CFDs. CFDs are contracts that allow you to make money on the price movements of an underlying asset, such as a share or commodity. Warning – these are complex products best suited to experienced traders.

How do I buy cannabis stocks?

  1. Choose a share trading platform. If you’re a beginner, our table below can help you choose.
  2. Open your account. You’ll need your ID, bank details and tax file number.
  3. Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
  4. Find the shares you want to buy. Search the platform and buy your shares. It's that simple.
Note: The value of your investments can fall as well as rise and you may get back less than you invested. Past performance is no indication of future results.

Updated October 21st, 2019
Name Product Monthly fee Standard Brokerage Fee Margin trading - Online
$0
$8.00 or 0.1%
Yes
Special offer: Earn up to 10,000 Qantas Points when you start trading on a new IG Share Trading account. T&C applies.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, forex and CFDs, plus get access to 24-hour customer support.
$0
$6.99 or 0.1%
Yes
High quality, low-cost brokerage on global share trading.
Access up to 19,000 global stocks on 36 of the world’s major stock exchanges and enjoy some of the most competitive FX rates on the the market when you trade with Saxo Capital Markets.
$0
$9.50
No
Trade ASX-listed shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
$0
$15 for first 10 trades
Yes
Offer: For a limited time, get a custom deal based on your trading preferences when you switch to Bell Direct.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
$0
$11 or 0.1% for first 10 trades (for trade value up to $11,000)
Yes
Access a broad range of investment products from Australia and overseas.
Take advantage of IPOs and trade shares, warrants, options and CFDs listed across the ASX, SSX and Chi-X, and other major global exchanges, including US, Canada and UK markets.

Compare up to 4 providers

Cannabis products

While smoking weed is perhaps the most well-known use of cannabis, there are many types of businesses that are set to benefit from the growing sector. In Australia and other countries, legalisation of many of these products is still new and in some cases, still underway. These include the following:

  • Medicinal products. Medicinal cannabis is used in Australia toward the treatment of cancer pain, epilepsy, palliative care, chemotherapy nausea, neuropathic pain, anorexia and neurological conditions.
  • Science and research. Recent policy changes mean that cannabis may be cultivated for both science and medicinal reasons in Australia.
  • Recreational use. Marijuana as a recreational drug is still illegal or restricted in most countries and in some cases carries serious punishment. However, legalisation is starting to occur in parts of the US and in all of Canada. It's consumed to achieve feelings of relaxation or euphoria – however, there are also many risky side effects.
  • Food products. Hemp is used as an ingredient in a range of products including cooking oils, snacks, protein powder, cooking flour and more. The sale of hemp food products in Australia was legalised in 2017.
  • Building materials. Hemp is used in insulation and building construction materials and has several names, including hempcrete, hemp masonry and hemplime.
  • Clothing. Hemp is broadly recognised as one of the most sustainable materials available in the manufacturing of clothing.
  • Beauty products. Hemp is commonly used in various health and beauty products, such as moisturisers, lip balm, makeup and skin oils.

Marijuana vs Hemp

Unlike marijuana, hemp is not normally a narcotic. While hemp and marijuana come from the same cannabis plant, hemp has a lower component of the psychoactive THC – which means that it has no psychoactive effects. Typically, hemp is used in food products, building materials and textiles while marijuana is used for medicinal and recreational purposes.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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