How to Trade the Best Weed Stocks on the Robinhood App

 marijuana stocks on robinhood app
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Best Marijuana Stocks on Robinhood App

There is no such thing as a free lunch. But thanks to an app called “Robinhood,” there is free trading. Robinhood is a commission-free trading app that is very popular among investors. It offers a vast range of different stock options that can be traded without paying costly fees to a stockbroker.

I’ll show you how to buy the best marijuana stocks on the Robinhood app, and explain why buying cheap marijuana stocks on Robinhood might just not work.

But first, you can see how and why to invest in marijuana stocks here.

Why to Use or Not Use the Robinhood App for Trading

Robinhood is a free stock-trading mobile app that serves both “iOS” and “Android” devices. The app has an easy-to-use interface and very good integrations in order to easily deposit money and begin investing.

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The Robinhood stocks include most U.S. equities and exchange-traded funds (ETFs) that are listed on major U.S. stock exchanges.

The Robinhood app is ideal for beginners looking to start low-cost stock trading and for investors on the go.

In addition to the free trading, the benefits of the app include multiple integrations for banking deposits and no fees for transfers out. Robinhood offers investors the opportunity to trade over 5,000 securities.

On the flip side, the app lacks research reports and some features require premium paid upgrades. And then there is the marijuana conundrum.

How to Invest in Marijuana on the Robinhood Exchange

With marijuana legalization opening the doors for pot investors, many people are wondering if they can reap the same commission-free benefits with marijuana investments. A lot of people ask how to trade the best weed stocks on the Robinhood app.

Well, there is good news and bad news.

Here’s the bad news first: Robinhood does not support trading foreign stocks or over-the-counter (OTC) stocks—stocks that are not listed on the Nasdaq or the New York Stock Exchange (NYSE).

This is a big blow to traders, since the majority of existing cannabis stocks are either traded via OTC markets or foreign exchanges like TSX Venture Exchange (TSXV), the Canadian Securities Exchange (CSE), the Frankfurt Stock Exchange (FWB), the Tel Aviv Stock Exchange (TASE), and the Australian Securities Exchange (ASX).

Now for the good news: if you are a cannabis investor and want to take advantage of Robinhood’s commission-free trading, all is not lost. You could still do it on a few cannabis-related stocks that are traded on the NYSE and the Nasdaq.

Cannabis Stocks Listed on Robinhood

The following table lists the marijuana stocks that can be traded on the Robinhood app without paying any commission.

Company Stock Ticker
22nd Century Group Inc NYSEAMERICAN: XXII
AbbVie Inc NYSE:ABBV
Cara Therapeutics Inc NASDAQ:CARA
Compass Diversified Holdings NYSE:CODI
GW Pharmaceuticals PLC- ADR NASDAQ:GWPH
Innovative Industrial Properties Inc NYSE:IIPR
Insys Therapeutics Inc NASDAQ:INSY
Intec Pharma Ltd NASDAQ:NTEC
Marrone Bio Innovations Inc NASDAQ:MBII
Scotts Miracle-Gro Co NYSE:SMG
Therapix BioSciences Ltd. NASDAQ:TRPX
Zynerba Pharmaceuticals Inc NASDAQ:ZYNE

(Source: “Top Marijuana Penny stock List 2018 Robinhood,”Robinhood, December 10, 2017.)

Some of the above stocks represent the top penny marijuana stocks on Robinhood in 2018. While these few stocks might seem like a small slice of the marijuana pie, do keep in mind that, as the cannabis industry grows and evolves, this list will not stay this short for long.

Also, keep in mind that smaller marijuana and marijuana-related companies will be eager to join the larger companies that are already listed on the Nasdaq or the NYSE.

Better still, with the launch of a variety of U.S.-based cannabis ETFs just around the corner, one can reasonably assume that, once these ETFs are open for general trading, investors will be able to trade them commission-free on Robinhood.

The best news is that the developers of Robinhood are not satisfied with letting the status quo remain. They understand that the more traders using their app, the more beneficial it will be for Robinhood’s business model.

The developers have expressed a desire on Robinhood’s web site to support additional securities in the near future—securities like the following:

  • foreign domiciled securities
  • OTC equities
  • options
  • preferred stocks
  • tracking stocks
  • warrants
  • mutual funds
  • bonds and fixed income trading
  • foreign exchange

And some of these securities, such as the OTC equities, will definitely include marijuana stocks.

Guidelines for Cannabis Investors for Using the Robinhood App

If you are a new marijuana stock investor, you may want to make the most of the Robinhood app, since it will ensure that your profits are not offset by trading fees and commissions.

However, given the limited number of stocks on the app, there are three things you could do.

First, research the marijuana stocks listed on the Nasdaq and NYSE, and preferably opt for a company that has performed well over time, especially over the past three months. But you also want the stock to show a little bit of fluctuation, with regular ups and downs.

Once you select the company, see its low point over the past week, and see what its high point is.

Using this data, go to “Order Types” and use the “Limit Order” option (because you don’t want to pay full price). Here, you enter the maximum that you want to pay for the stock. This will restrict the app from paying more than you want to. Then, whenever the stock price dips below the price you want, the app will go ahead and buy it for you.

Second, keep a lookout for upcoming marijuana ETFs that will be offered on the Robinhood app.

Third, put an alert for Robinhood news on your phone or desktop, so you do not miss the day when Robinhood throws its doors open and starts supporting other securities.

While there’s no getting away from the fact that the opportunities for cannabis investors on the app are currently limited, the potential for an expansion of access in the future is promising.