× Close

Our Blog

Back to Categories


How to Invest in Cannabis Stocks – A Simple Guide for Beginners

Many investors are eager to get a piece of the action, given the amount of money involved. However, unlike the traditional stock market, investing in cannabis stocks is substantially more complicated due to the industry’s legal status.

Hardly a day goes by without headlines reporting record cannabis profits. According to a report by Grand View Research, the global legal marijuana market size was valued at $17.8 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 25.3% from 2022 to 2030. 

Below we provide a step-by-step guide to investing in cannabis stocks, including which ones to buy, what to look for, and what to avoid.

Learn the Basics of the Cannabis Industry

Before diving in, it is important to know the different types of businesses you can invest in. Here are the most common types if you want to get into the cannabis business:

Understanding the different types of cannabis businesses can help you make informed investment decisions based on your interests and goals. 

Understanding the Risks of Buying Cannabis Stocks

As with any investment, this comes with risks. It’s essential to be aware of these risks so that you can make educated deals and minimize your losses. Here are some potential risks to consider:

While the profit potential is high, the risks can be substantial. Therefore, before you invest any money in any cannabis stock, you must understand these risks. 

How to Invest in Cannabis Stocks

Once you understand the basics of the cannabis industry and the risks involved in investing in it, it’s time to start investing. Here are the steps you need to follow to invest in it:

  1. Choose a Broker: You’ll need a broker to buy and sell stocks. Look for one that offers low fees and easy-to-use trading platforms.
  2. Decide Between Individual Stocks and ETFs: There are two types of marijuana stocks: individual stocks and marijuana ETFs. Individual stocks are shares of a single company, while marijuana ETFs are funds that invest in multiple companies.
  3. Research and Choose Your Investments: Once you’ve chosen your broker and decided on individual stocks or ETFs, it’s time to research and select your investments for the best cannabis stocks for you. Look for companies with strong financials, experienced management teams, and solid growth potential.
  4. Monitor Your Investments: Investing here is not a set-it-and-forget-it strategy. You’ll need to monitor your investments regularly and be prepared to make changes as required.
  5. Diversify Your Portfolio: It’s always a good idea to diversify your portfolio to minimize risk. It means investing in multiple stocks or ETFs in different areas of the cannabis industry.

Top Cannabis Stocks to Watch in 2023

Investing in this industry can be risky, but if you do your research and choose wisely, it can also be rewarding. Here are three of the best ones to look out for in 2023:

Final Thoughts

Investing in cannabis stocks can be a lucrative and exciting way to participate in the rapidly growing legal marijuana industry. However, it’s important to remember that the market is still young and volatile, and not all companies will be successful. Therefore, before investing in any cannabis stock, it’s essential to do your research and understand the potential risks involved.

At Safe Harbor Financial, we understand the unique challenges and opportunities presented by the legal cannabis industry. So, if you’re a cannabis entrepreneur looking for a partner you can trust, contact us today or call 501-476-6696 for a quicker response to learn more about how we can help you grow your business. And if you’re an investor looking to enter the exciting world of cannabis, we’re here to provide guidance and support every step of the way.

Business Banking You Can Trust

Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.

Open Your Account