We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

Investing

Stocks

How to Buy Marijuana Stocks: A Beginner's Guide

Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.

A person is diving into a marijuana shape swimming pool.

Kiersten Essenpreis for Money

Investing in marijuana companies has gone from niche to mainstream over the past decade as more Americans gain legal access. As of January 2026, recreational cannabis is legal in 24 states (plus Washington, D.C. and Guam) and medical use is legal in 42 states. The U.S. market is projected to reach roughly $47 billion in 2026, and capital has followed opportunity — but the marijuana sector is still uniquely complicated and risky. This guide breaks down what you need to know before you buy marijuana stocks, how the industry is structured, the ways to invest, and practical steps for getting started.

Key Takeaways

The cannabis industry splits into U.S. Multi-State Operators (MSOs) and Canadian Licensed Producers (LPs); MSOs earn the most revenue but often trade on OTC markets, while many Canadian LPs trade on NASDAQ/NYSE but don’t have direct access to the U.S. retail market.

Executive Order 14370 (late 2025) rescheduled cannabis to Schedule III, which may improve profitability by removing the punitive 280E tax treatment — but banking, custody and exchange issues still complicate investing.
You can invest in individual stocks (higher risk, higher upside) or ETFs (broader exposure, lower single-company risk).
OTC-traded US operators can be hard to access on some brokerages and have wider spreads and lower liquidity; Canadian names and ETFs are generally easier to buy.

Ads by Money. We may be compensated if you click this ad.Ad

The marijuana industry at a glance

Publicly traded cannabis firms are fewer and younger than those in many other industries. Because Canada legalized recreational use nationwide in October 2018, many of the larger public companies are Canadian. Broadly, cannabis companies fall into three groups:

Growers/Operators

U.S. MSOs: Vertically integrated firms that grow, process and sell to dispensaries across multiple states (examples: Green Thumb, Trulieve). These companies are typically the highest-revenue players in the U.S. market but—because cannabis remains federally controlled they often trade on Over-The-Counter (OTC) markets.
Canadian LPs: Licensed Producers headquartered in Canada (examples: Tilray, Canopy Growth) that generally trade on major U.S. exchanges (NASDAQ/NYSE) but don’t have direct access to the U.S. retail market.

Industry players

Companies that provide specialized services or assets for the cannabis ecosystem (for example, pharmaceutical companies, packaging firms or real-estate investment trusts like Innovative Industrial Properties (IIPR)).

Ancillary companies

Firms that operate outside the core cannabis business but sell products or services to growers or dispensaries (technology, hydroponics, compliance software, etc.).

Risk profile: the closer a company is to cultivation and retail sales, the more volatile it tends to be. Some major cannabis stocks have been more than twice as volatile as the S&P 500 in recent years, and many public cannabis firms still have small market caps, which can magnify price swings.

Why marijuana stocks are risky (and what’s changed)

Young, speculative companies. Many public cannabis companies are still building scale and positive cash flow.
Regulatory & legal uncertainty. State rules vary; changes in legalization or licensing can materially affect revenue.
Federal restrictions and trading friction. Until rescheduling, federal law barred many normal banking and exchange functions. Executive Order 14370 (late 2025) rescheduled cannabis to Schedule III, which is expected to remove the punitive 280E tax burden and could boost margins for U.S. operators — but implementation takes time and custody/banking limitations persist.
Liquidity & market structure. U.S. MSOs often trade OTC, which means wider bid-ask spreads, less liquidity, and sometimes restricted access on retail trading apps. Many major banks and trading apps (including Robinhood) limit or block OTC cannabis stocks.
Dilution & capital needs. Small companies often issue equity to fund operations, diluting existing shareholders.

Ways to invest in marijuana stocks

There are two primary ways to invest: Buy shares of a cannabis-related company or invest in a fund that tracks this industry.

Individual stocks

Buying shares of a single cannabis company can deliver big gains — or big losses. Do the same homework you would for any stock: read quarterly/annual financials, examine the balance sheet, understand the business model and know the company’s competitive position.

Things to watch for when analyzing cannabis companies:

Revenue growth and profitability trends (gross margin, EBITDA)
Cash runway and access to financing
Store and dispensary footprint (for MSOs), revenue per store
Regulatory exposure by state and licensing stability
Management experience, insider ownership and past execution on strategy
Debt load and capital structure
Listing venue (OTC vs NASDAQ/NYSE) and average daily volume (liquidity)

2026 market leaders

Curaleaf Holdings (CURLF) — U.S. MSO
Green Thumb Industries (GTBIF) — U.S. MSO
Trulieve Cannabis (TCNNF) — U.S. MSO
Verano Holdings (VRNOF) — U.S. MSO
Tilray Brands (TLRY) — Canadian LP (NASDAQ)
Innovative Industrial Properties (IIPR) — REIT (NYSE)
Cronos Group (CRON) — Canadian LP (NASDAQ)
Cresco Labs (CRLBF) — U.S. MSO
Glass House Brands (GLASF) — U.S. Cultivator
Canopy Growth (CGC) — Canadian LP (NASDAQ)

(The cannabis landscape changes quickly; use these names as starting points, not as a buy list.)

Marijuana ETFs

ETFs are an easier way to get diversified exposure to the sector and reduce single-stock risk. The ETF market consolidated after several closures in 2023–2024; the main surviving funds include:

AdvisorShares Pure U.S. Cannabis ETF (MSOS) — largest ETF focused exclusively on U.S. operators
Amplify Alternative Harvest ETF (MJ) — global exposure, heavily weighted to Canadian LPs and partnerships with tobacco/pharma
AdvisorShares Pure Cannabis ETF (YOLO) — actively managed mix of U.S. and global stocks
Amplify Seymour Cannabis ETF (CNBS) — actively managed
Roundhill Cannabis ETF (WEED) — tier-weighted index of U.S. MSOs
Cambria Cannabis ETF (TOKE) — focuses on value and quality across the cannabis ecosystem

Ads by Money. We may be compensated if you click this ad.Ad

How marijuana stocks fit in your portfolio

Cannabis remains riskier than many mainstream sectors. If you choose to invest:

Treat marijuana stocks/ETFs as a speculative sleeve of your portfolio and size positions accordingly (many advisors suggest a small single-digit percentage of your overall portfolio for highly speculative sectors, though the right amount depends on your risk tolerance and time horizon).
Prefer ETFs if you don’t want to pick single winners or tolerate individual stock volatility.
Be mindful that some index funds and small-cap ETF holdings may already include cannabis companies, so check your current holdings before adding exposure.