Cannabis stocks have had a meteoric rise following new legislation, although the buzz around the stocks has been cooling of late.
However, the sector still has the potential to exponentially rise even if it faces a number of headwinds.
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 6 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.
Copy portfolio. Share trading app eToro has a pretty neat portfolio of cannabis stocks that you can invest in. These are called copy portfolios and there are a bunch of investment themes you can track. To check them out, click on eToro's link in the table below.
How do I buy cannabis stocks?
Choose a share trading platform. If you're a beginner, our table below can help you choose.
Open your account. You'll need your ID, bank details and tax file number.
Confirm your payment details. You'll need to fund your account with a bank transfer, debit card or credit card.
Find the shares you want to buy. Search the platform and buy your shares. It's that simple.
Finder survey: Which industries do Australians hold stocks in?
Response
Cannabis
3.29%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023
ASX cannabis stocks
Company summary
AusCann Group Holdings Ltd engages in the development and commercialization of cannabinoid-derived therapeutic products for humans and animals in Australia and internationally. Its principal product includes the novel tetrahydrocannabinol and cannabidiol (THC/CBD), a powder-based hard-shell capsules based on AusCann's Neuvis platform for the treatment of pain and related indications. The company is also involved in the research and development of medicinal cannabis. It offers its products to healthcare professionals and veterinarians. AusCann Group Holdings Ltd is based in West Perth, Australia.
Historical performance
Stock information
Market capitalization: $18062432
P/E ratio: 0
Company summary
Althea Group Holdings Limited manufactures, distributes, and sells cannabis-based medicines and recreational cannabis products in Australia, the United Kingdom, Canada, Germany, and Ireland. It also offers a range of education, access, and management services to support eligible patients and healthcare professionals in navigating medicinal cannabis treatment pathways. In addition, the company provides formulation and manufacturing of recreational cannabis products, such as beverages, edibles, concentrates, and topicals; and owns and operates a private medical cannabis clinic network under the MyAccess Clinics name. Althea Group Holdings Limited was founded in 2016 and is based in Melbourne, Australia.
Historical performance
Company summary
Bod Australia Limited operates as a cannabidiol and medical cannabis healthcare company in Australia, the United Kingdom, the European Union, and the United States. The company operates through three segments: Medical, Over The Counter (OTC) Cannabidiol/Hemp, and OTC Herbals. It engages in the development and manufacture of cannabidiol and hemp products for consumers; and development, manufacture, and distribution of therapeutics medicinal cannabis products for medical markets. The company has a collaboration agreement with Drug Science UK to assess the efficacy of its medicinal cannabis, MediCabilis in managing symptoms associated with the long-term impact of SARS-CoV-2. Bod Australia Limited was incorporated in 2014 and is based in Double Bay, Australia.
Historical performance
Stock information
Market capitalization: $28597052
Dividend yield: 0%
Company summary
Botanix Pharmaceuticals Limited engages in the research and development of dermatology and antimicrobial products in Australia. The company engages in development of novel treatments for common skin diseases and infections. Its product pipeline includes Sofpironium Bromide, a drug in development for the treatment of primary axillary hyperhidrosis that has completed Phase 3 clinical programs; BTX 1503, a transdermal gel formulation for the treatment of serious acne in adults and teenagers that has completed Phase II clinical trials; BTX 1801, which has completed Phase IIb clinical trials for the treatment of staphylococcus aureus and methicillin resistant staphylococcus aureus; BTX 1702 that is in Phase II clinical trials for the treatment of papulopustular rosacea; and BTX 1204A for the treatment of atopic dermatitis. Botanix Pharmaceuticals Limited was incorporated in 1984 and is based in Leederville, Australia.
Historical performance
Company summary
Cann Group Limited engages in the breeding, cultivation, production, manufacturing, supplying, and selling medicinal cannabis. It licenses to undertake research and to cultivate cannabis for human medicinal and research purposes. The company was founded in 2014 and is based in Port Melbourne, Australia.
Historical performance
Company summary
Cann Global Limited engages in the production and distribution of medicinal cannabis medications, natural foods, and cosmeceuticals in Australia and internationally. It operates through Hemp and Medical Cannabis Products, and Mining Exploration and Evaluation segments. The company grows and cultivates hemp and medical cannabis products; provides nutritious and vitamin packed plant-based foods under the Grass Roots brand; and offers skincare products under the Fuss Pot brand. It also engages in the exploration and development of bauxite. The company was formerly known as Queensland Bauxite Limited. Cann Global Limited was incorporated in 2007 and is based in Sydney, Australia.
Historical performance
Stock information
Market capitalization: $5436345
P/E ratio: 0
Dividend yield: 0%
Company summary
CannPal Animal Therapeutics Limited, an animal health company, engages in the research and development of plant-based therapeutic products for pets in Australia. It develops CPAT-01, a cannabis-derived pharmaceutical product to provide veterinarians and pet owners to treat pain and inflammation in dogs. The company was incorporated in 2016 and is based in Double Bay, Australia. As of March 11, 2021, CannPal Animal Therapeutics Limited operates as a subsidiary of AusCann Group Holdings Ltd.
Historical performance
Stock information
Market capitalization: $15831250
Dividend yield: 0%
Company summary
Creso Pharma Limited develops, registers, and commercializes pharmaceutical-grade cannabis, and hemp-based nutraceutical products and treatments for human and other health in Europe, Canada, Asia Pacific, the United States, and internationally. The company develops and commercializes therapeutic products; develops and sells beauty and personal care products under the Green Goo, Southern Butter, and Goodgoo brands; and cultivates, processes, and sells cannabis products. Its products include cannaQIX, a nutraceutical product containing hemp oil extract, and vitamins and minerals in a lozenge delivery system; the ImpACTIVE Pro Releaf Stick to provide relief to muscle aches, particularly in professional sport, and acts as an alternative to pharmacological solutions sold through online channels; Ritual Green, a dried flower; Ritual Sticks for pre-rolled joints; and Ritual Gold, a handheld vapouriser. In addition, the company develops Halucenex, which is in phase II clinical trials, which will test the efficacy of psilocybin on treatment of resistant Post Traumatic Stress Disorder. Further, it engages in marketing of its hemp based food, feed supplements, and topical products; manufacture and sale of packaged consumer products; conducts clinical trial and development of synthetic psilocybin micro and macro dose formulations to treat treatment resistant depression and anxiety; and development of psychedelic medicines. The company was incorporated in 2015 and is headquartered in Nedlands, Australia.
Historical performance
Stock information
Market capitalization: $23106150
Dividend yield: 0%
Company summary
eSense-Lab Ltd, a life sciences research and development company, specializes in the commercialization of phytochemical profiling of plants. It focuses on the development and manufacturing of terpene profiles of the cannabis plant for use in various applications, such as concentrates, medicine, topical treatments, e-liquids, beverages, personalized medicine, cosmetics, and food additives. The company was incorporated in 2016 and is based in Nes Tziona, Israel.
Historical performance
Stock information
Market capitalization: $9180684
Dividend yield: 0%
Company summary
Elixinol Wellness Limited, through its subsidiaries, engages in the manufacture and distribution of hemp derived nutraceuticals, skincare, and food products in the Americas, Europe, and Australia. It offers hemp derived cannabidiol and food products, dietary supplements, topicals, and skincare products. The company was formerly known as Elixinol Global Limited and changed its name to Elixinol Wellness Limited in May 2021. The company was incorporated in 2017 and is headquartered in Sydney, Australia.
Historical performance
Company summary
IDT Australia Limited engages in the research, development, manufacture, and sale of active pharmaceutical ingredients (APIs) and finished dose form products in Australia and internationally. It offers analytical method development, stability chambers, chemistry and microbiology quality control laboratory, and quality assurance services. The company also provides project management, chemical, analytical chemistry, pharmacy, clinical packaging, and regulatory affairs, as well as pharmaceutical development services in various dosage forms. In addition, it offers medicinal cannabis products, as well as various contract manufacturing services. IDT Australia Limited was founded in 1975 and is headquartered in Boronia, Australia.
Historical performance
Stock information
Market capitalization: $55846436
PEG ratio: 0
Company summary
Incannex Healthcare Limited, a clinical stage pharmaceutical development company, engages in the research, development, and sale of medicinal cannabinoid and psychedelic pharmaceutical products and therapies in Australia. The company offers APIRx-1801, an ultrapure tetrahydrocannabinol; APIRx-1802, an ultrapure CBD; and APIRx-1803, an ultrapure cannabigerol. It also develops IHL-42X, which has completed Phase IIb clinical trial for obstructive sleep apnea; Psi-GAD that is in Phase IIa clinical trial for generalized anxiety disorder; MedChew Dronabinol, which has completed Phase Ia clinical trial for nausea and vomiting in chemotherapy; CanChew Plus that has completed Phase IIa clinical trial for irritable bowel syndrome; APIRx-1601, which has completed Phase IIa clinical trial for vitiligo; APIRx-1602 skin that has completed Phase IIa clinical trial for psoriasis; and APIRx-1603, which has completed Phase IIa clinical trial for atopic dermatitis. In addition, its product portfolio includes IHL-675A for inflammatory lung disease, IHL-675A for rheumatoid arthritis, IHL-675A for inflammatory bowel disease, and IHL-216A for traumatic brain injury and concussion, which have completed pre-clinical trials; and MedChew 1401 for pain and spasticity in multiple sclerosis, MedChew GB for post-herpatic neuralgia, MedChew-1502 for Parkinson's disease, MedChew-1503 for dementia, MedChew RL for restless legs syndrome, APIRx 1505 Flotex for chrohn's disease, CanChew RX and SuppoCan (Suppository) for inflammatory bowel disease, CheWell for addiction of cannabis, CanQuit for tobacco smoking cessation, CanQuit O for opioid addiction, APIRx-1701 for glaucoma, suppoCan gastro for IBD, and APIRx-1702 for dry eye syndrome that are in pre-clinical trials. The company was formerly known as Impression Healthcare Limited and changed its name to Incannex Healthcare Limited in June 2020. Incannex Healthcare Limited was incorporated in 2001 and is based in Docklands, Australia.
Medlab Clinical Limited, a biotechnology company, researches, develops, and pre-commercializes pharmaceutical and nutraceutical products in Australia. Its drug candidate includes NanaBis, a buccal spray from cannabis oil extract for oncology and pain management; and NanoCBD, a buccal spray from hemp oil extract for mental health. The company also develops NanoCelle, a patented sub-micron drug delivery platform that allows passive diffusion of active pharmaceutical ingredients directly into the bloodstream through oral-buccal, sublingual, intranasal, and transdermal or topical delivery. In addition, it offers virtual clinic services. The company was founded in 2012 and is headquartered in Botany, Australia.
Historical performance
Stock information
Market capitalization: $15071113
P/E ratio: 0
Dividend yield: 0%
Company summary
Hygrovest Limited operates as a cannabis investment company worldwide. It owns a portfolio of cannabis sector investments. The company was formerly known as MMJ Group Holdings Limited and changed its name to Hygrovest Limited in December 2021. Hygrovest Limited was incorporated in 2014 and is based in Sydney, Australia.
Historical performance
Stock information
Market capitalization: $13567286
PEG ratio: 0
Dividend yield: 0%
Company summary
MGC Pharmaceuticals Limited provides phytomedicines worldwide. The company produces and supplies medicinal cannabis products; and non-cannabis phytomedicines. Its principal product candidates include CimetrA, which is in phase III clinical trial for the symptomatic treatment of early COVID-19; CannEpil, a phase IIb cannabis-based therapy for drug-resistant Epilepsy; and CogniCann that is in phase II clinical trial for the symptomatic relief of Dementia. In addition, the company provides Irnican that is in preclinical phase for the tetrahydrocannabinol, as well as offers ArtemiC and non-pharma products. Further, it offers consulting services, including clinical research services. MGC Pharmaceuticals Limited was founded in 2014 and is based in Subiaco, Australia.
Historical performance
Company summary
Roto-Gro International Limited, an agricultural company, produces and sells rotational garden systems for the cultivation of cannabis and produce in Australia, Canada, and the United States. It also provides advanced automated nutrient delivery and water management systems; and iGrow software for the automation, monitoring, and configuration of the plant cultivation process. The company was incorporated in 2015 and is based in South Melbourne, Australia.
Historical performance
Stock information
Market capitalization: $3768523
P/E ratio: 0
Dividend yield: 0%
Company summary
Rhinomed Limited engages in the research, development, and commercialization of consumer and medical devices worldwide. The company offers wearable nasal technology that improve breathing, sleeping, and maintaining health and diagnose disease. Its products include Turbine for enhanced breathing in sports; Mute, which helps to breath more and snore less; Pronto, a vapor inhaler to improve airflow and better sleep; and Rhinoswab that is used to collect a nasal swab. The company also engages in developing programs in various markets, including sleep and sleep architecture, the impact of sleep and respiratory, function on cognitive issues, obstructive sleep apnea, pain, nausea, respiratory disease, and diagnostics and sensors; and offers a drug delivery platform for the delivery of cannabinoid formulations. The company was formerly known as Consegna Group Limited and changed its name to Rhinomed Limited in November 2013. Rhinomed Limited was incorporated in 2004 and is based in Cremorne, Australia.
Historical performance
Company summary
Suda Pharmaceuticals Ltd, a biotechnology company, focuses on the development of therapies for the treatment of cancer and conditions that affect the central nervous system in Australia and internationally. The company's product pipeline includes ZolpiMist, an oral spray of zolpidem tartrate to treat short-term insomnia, which is marketed under the brand name of Ambien or Stilnox; Sumatriptan, an oral spray formulation for the treatment of migraine headache; and Anagrelide to treat cancer. It has a license and supply agreement with Cann Pharmaceutical Australia Limited to develop an oral spray of pharmaceutical-grade cannabinoid derivatives for the treatment of drug-resistant epilepsy, melanoma and Sanofi; and collaborative research agreement with Imperial College London. The company was formerly known as Suda Limited and changed its name to Suda Pharmaceuticals Ltd in November 2017. Suda Pharmaceuticals Ltd was incorporated in 1999 and is headquartered in Osborne Park, Australia.
Historical performance
Stock information
Market capitalization: $23079360
PEG ratio: 0
Dividend yield: 0%
Company summary
THC Global Group Limited provides medicinal cannabis products to patients in Australia and internationally. The company operates through two segments, Manufacture and Distribution of Hydroponics Equipment, Materials and Nutrients; and Development and Delivery of Medicinal Cannabis. Its hydroponics products include lighting and power supplies, lighting relays and climate controls, ventilation and trimming products, extraction bags, plant rotation systems, eyewear, nutrients and accessories, etc. THC Global Group Limited has a strategic alliance with BOL Pharma-Israel; strategic partnership with Ascent Industries Corp?Canada, Sinapse and Pharma programs, and Anspec; distribution agreement with Endoca-Europe; and partnership with Medicinal Cannabis Industry Australia. The company was formerly known as The Hydroponics Company Limited and changed its name to THC Global Group Limited in November 2018. THC Global Group Limited was founded in 2016 and is based in Sydney, Australia.
Historical performance
Stock information
Market capitalization: $43575108
Dividend yield: 0%
Company summary
Zelira Therapeutics Limited, a bio-pharmaceutical company, engages in the research, development, and commercialization of cannabinoid-based medicines for the treatment of various medical conditions in Australia and the United States. The company offers formulations under the HOPE brand in Australia, Washington, Pennsylvania, and Louisiana, as well as develops Zenivol, a cannabinoid-based medicine for treatment of chronic insomnia. It also provides over the counter products, including SprinJene, an oral care product; and RAF FIVE, a dermatology product, as well as Zyraydi, an enhanced distillate capture and dissolution matrix technology. The company was formerly known as Zelda Therapeutics Limited and changed its name to Zelira Therapeutics Limited in December 2019. Zelira Therapeutics Limited was incorporated in 2003 and is headquartered in Perth, Australia.
Historical performance
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.
Cannabis products
While smoking weed is perhaps the best-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 for 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 scientific 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 a number of possible 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.
Meteoric rise and potential opportunity
Just 5 years ago, few investors took cannabis stocks seriously. Today, as billions of dollars pour into the sector thanks to changes in legislation, few doubt that cannabis will be one of the next big disruptors.
This is largely due to changing government regulations.
Countries continue to 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.
Risks
Despite the large opportunity, the sector has plenty of risks investors need to be wary of before investing.
Speculative bet. The sector is still emerging. It's a new industry with marijuana only being used beyond medical purposes since 2012. As such, most of the companies are small caps, which means they are likely to have large share price swings as well as being traded less often. As such, they are more speculative than large caps.
Limited investors, especially from large institutions. While the sector is growing, it certainly doesn't have the mainstream adoption of much of the market.
Valuation risks. Given the size of many of the stocks and potential growth being unknown, it's harder to valuate a fair price for these stocks.
Dilution risks. Cannabis stocks are still controversial and have challenges that are unique to the sector. As such, investors may face the risk that the companies they own have fewer ways to raise money other than through issuing more shares. This could mean the value of your ownership falls.
Commodity risks. Just like all other commodities, cannabis is a crop. Some years, its value will be higher; other years, it will fall. This risk can be avoided by not investing in the producers themselves.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment 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. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
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To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
Kylie Purcell is the senior investments editor and analyst at Finder. She has completed a Certificate of Securities and Managed Investments (RG146) and specialises in investment products including online brokers, robo-advisors, stocks and ETFs. See full bio
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