How to Legally Invest in Marijuana (Starting at Just $5)

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There’s a general notion that investing is complicated or that wealthy people are the chosen few that can participate. And it can be, depending on the type of investor you are.

Since the majority of us are not part of the 1%, another type of investing has been on the rise.

Micro-investing.

What is Micro-Investing?

It allows for everyday people to actually own stock affordably but still follow the three investing philosophies that make it work:

  1. Investing for the long-term
  2. Regularly invest
  3. Diversification

So why not just stick some cash in a bank’s savings account and call it a day? Well, investing for the long-term is more beneficial as market gains have consistently outpaced standard savings interest rates. Simply put, in the long (patient) run, you’re going to end up with more money investing than having just a simple savings account.

And when you regularly invest, it’s like another form of savings. Even if you invest small amounts weekly or monthly, the magic of compounding starts to happen. This is when your interest on assets that you own, also earn interest, which can grow your investment even further. The earlier you start, the more time is on your side to allow it to grow.

The third philosophy, diversification, is straight forward. You’re not putting all your eggs in one basket, in case something goes awry. That’s why it’s important to have an investment portfolio that includes stocks, bonds, mutual funds and ETFs (exchange-traded funds) since each carries different levels of risk. Since the markets are always changing, your tolerance for volatility plays a large role in your diversification.

The Legal Cannabis Industry Expected to Hit $25 Billion by 2021

In 2011, there were very few cannabis investors that expected the marijuana industry to mature into a $12 billion industry in eight short years(*). Now it’s expected to grow even faster.

The mindset towards marijuana (whose scientific name is cannabis) have changed drastically and its recreational use has become more acceptable. There are now 33 states where doctors can prescribe cannabis for medical reasons and California became the largest state in the U.S. (out of 11) to legalize marijuana.

Due to it’s growing popularity, this means big business.

Would I Get in Trouble with the Law if I Invest in Corporate Cannabis?

Short answer = no.

The government can file charges against a company but you just owning securities (tradable financial asset of any kind like stocks, bonds, etc) generally wouldn’t put you under legal fire.

How Would I Start Investing in the Legal Cannabis Industry?

The micro-investing app called Stash, which launched back in 2015, has now grown to 3+ million Americans investing, as their approach to this topic makes it easy to start and understand.

On the Stash platform, you can invest in the legal cannabis industry with as little as $5, making it an affordable investment threshold. This means you’ll be able to invest in companies that are legally developing cannabis products for both medicinal and recreation purposes.

The platform also lets you diversify by letting you choose from over 250 investments that aligns with your goals and interests.

It doesn’t take very long to start (less than 2 minutes) and Stash gives new members a welcome bonus of $5 as well. If you want to start investing in an industry that’s been growing and is expected to hit $25 billion in a few short years, consider Stash to try first as costs reasonably start at $1 per month.

Monthly Cost
$1
for basic accounts
Management Fees
0.25%
for accounts over $5,000
Minimum Deposit
$5

Pros
  • Low $5 account minimum
  • More flexibility than a traditional robo-advisor
  • Fractional investing lets you buy into expensive stocks
Cons
  • The fees add up, especially for small accounts
  • ETF expense ratios eat into returns
  • Primarily for ETF and stock investing

*cannabis lab image for illustrative purposes only

Transaction costs and fees: No add-on trading fees*, Pricing starts at $1 a month for personal investment accounts and 0.25% fee for accounts $5,000 and over. 

*Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. Stash does not endorse the illegal use of Narcotics. This material has been distributed for informational and educational purposes only and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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