Why marijuana stocks are expected to boom?
With cannabis being legalized in Canada and some of the states in the US, there has been an increase in popularity about this plant-based product.
But the draw in attention is not just for those who are interested for medical and recreational use in which the latter has always been a sensitive subject. There’s also a significant interest among traders who want to invest in this ever growing market.
Experts predict that the marijuana industry in the US can boom to as much as $70 billion in a decade and with such forecasts, it unquestionable for most investors to capitalize on its stock.
What are marijuana stocks?
These are the shares of companies that are growers and distributors of marijuana primarily for medical and recreational purposes. Under this market are the known sectors:
1. Growers – companies that are involved in the cultivation, selling and distribution of weed
2. Biotechs – the sector that is dedicated for developing the pharmaceutical marijuana industry
3. Suppliers – these are the providers of materials like fertilizers for physically growing marijuana
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Trading cannabis CFDs with Plus500
With Plus500 you can ride the wave of this trending instrument via leveraged trading. With just a minimum initial deposit of $100, you can use leverage of up to 1:20 to gain the effect of $2,000 capital for investing on cannabis indices and popular shares.
Another notable advantage of trading this market with Plus500 is that you get to enjoy tight spreads and no commissions for your trades.
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Since Plus500 will give you access to a wide variety of financial markets, you will have the liberty to trade on a selection CFDs on leading producers of medical products that are related to cannabis (and cannabinoid derivatives).
Buying and selling marijuana CFDs
Here’s what you need to remember: You are not actually buying or selling marijuana!
With Plus500, you are trading a contract for difference (CFD) which means that you won’t be physically owning weed. This is a lot safer and simpler since owning one may cause you some legal issues in your country.
Via CFDs, you are buying a contract between you and the CFD provider (Plus500) to pay each other the difference between the price of the underlying asset at the time the contract is made and its price when the transaction is closed.
When you buy or sell cannabis in Plus500, you are basically buying or selling a contract to resolve the difference after the order has been terminated.
So which medical marijuana stocks are best to invest on?
Majority of the top medical cannabis shares and stock exchanges are listed Plus500’s cannabis category on the platform. Listed below are the most talked about companies that are available with this CFD service provider:
1. GW Pharmaceuticals Plc (GWP)
GW Pharmaceuticals PLC (GWP) is a British biopharmaceutical company that is listed on the London Stock Exchange. They are known for developing cannabinoid medicines for treating several symptoms and diseases such as childhood epilepsy, cancer pains and multiple sclerosis.
Epidiolex, the company’s fruit-flavored liquid was created to treat two forms of severe childhood epilepsy and has been approved by the FDA. This is the very first cannabis-derived drug that has been granted with an approval by the federal agency.
2. Insys Therapeutics (INSYS)
Insys Therapeutics is a specialty drug developer that is based in Arizona, USA. This company provides therapeutic products using sublingual spray drug delivery technology for patients that cannot find solutions from the pharmaceutical market which is believed to deliver significant benefits over other known methods.
3. Canopy Growth Corp (CGC)
Founded in 2014, Canopy Growth is a cannabis company that is based in Ontario, Canada. This is the largest publicly traded weed stock having a market capitalization of $11.6 billion and the very first regulated cannabis producer in North America. It is listed on the Toronto Stock Exchange with a ticker symbol of WEED and on the New York Stock Exchange under CGC.
4. Tilray Corp (TLRY)
This pharmaceutical company is also based in Canada and was founded in 2013. They made history by becoming the very first pure-play marijuana producer to complete an IPO on a US stock exchange. With its international expansion, it is likely to become one of the top weed producers within the coming years.
5. Aurora Cannabis (ACB)
This Canadian licensed cannabis producer operates in 18 countries and is listed on the Toronto Stock Exchange with a ticker symbol ABC.TO. It was listed on the New York Stock Exchange in October 2018 under the ACB symbol.
6. Aphria (APHA)
Founded 2014, also based in Canada and listed both on the Toronto Stock Exchange and the New York Stock Exchange, they are considered to be the world’s biggest cannabis companies in the world with a market cap of $3 billion.
The good news is that they regularly add new popular medical marijuana stocks based on the market trends and the demands of their clients so if there’s a growing interest in a specific company that is involved in cannabis stocks then it’s most likely to be included in Plus500’s platform anytime soon.
And here’s another great news…
Alternatively, you may also place a Buy or Sell on the Cannabis Stock Index (BGCANG) which follows the world’s top medical marijuana shares so instead of selecting specific cannabis stocks, you may also invest on the cannabis industry trend as a whole.
So how volatile is this market?
The marijuana market, particularly the medical sector, has gained the spotlight over the last years since it has been legalized in some countries. The interest in products that contain common cannabinoids and the increase in their production is expected to grow significantly but are also experience price swings.
Risk Management Features
Via the Plus500 platform, you can have better control of your profits and losses thanks to their risk management tools.
How can I actually use this?
By using these tools, you can set Stops and Limits so the the platform will automatically lock in your profits and minimize the losses if the underlying instrument’s value has reached the specific price that you set.
This is very useful especially if the cannabis CFD’s that you’re investing on are experiencing volatile price movements.
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And here’s the deal: It’s completely free of charge!
Using these tools won’t require you any fees so you can simply focus on your Buy and Sell positions or simply watch the results of your trades since you have already set the parameters on when to close these positions.
With retail and pharmaceutical cannabis becoming more and more legal, there is an increasing opportunity for you to invest in marijuana stocks.
And by trading marijuana stocks via contracts for difference or CFDs, you will be able to capitalize on cannabis stocks when their prices are rising and even when it’s falling as well.
If you don’t know where to start and are looking for a trusted broker then be sure to choose Plus500 for investing in cannabis CFDs.
*Risk warning: 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.