Paying stock brokers hefty commissions on trades is a problem all stock traders eagerly aim to avoid, which is why the Robinhood app has become so popular among investors.
Essentially, Robinhood is a commission-free trading app that offers a vast range of different stock options that can be traded without enduring the costly fees of a stock broker. So, naturally, more and more people who are interested in investing in the cannabis industry are looking to the mobile app to see if they can reap the same commission-free benefits on marijuana investments. And in that regard, there’s good news and bad news.
Currently, Robinhood offers the opportunity to trade over 5,000 securities within the app, which includes most U.S. equities and exchange trade funds (ETFs) that are listed on major U.S. exchanges. But as of right now, the app doesn’t offer the ability to trade over-the-counter (OTC) stocks (e.g. non-NASDAQ and NYSE) or foreign stocks, which poses an obstacle for cannabis investors.
The majority of existing cannabis stocks are either traded via OTC markets or on foreign markets, including the TSX Ventures Exchange, the CSE, the Frankfurt Stock Exchange, the Tel Aviv Stock Exchange, and the Australian Securities Exchange. And that means, for now, major marijuana stocks can’t be traded on the app.
But all is not lost if you’re a cannabis investor seeking commission-free trading on Robinhood.
A handful of cannabis-related stocks are currently available on NASDAQ and NYSE
For starters, while the number of cannabis companies listed on the NASDAQ and NYSE is low, there are a few marijuana-related stocks that can be found there and traded commission-free on Robinhood, including:
- 22nd Century Group Inc.
- The Scotts Miracle-Gro Company
- Innovative Industrial Properties, Inc.
- Intec Pharma Ltd.
- Compass Diversified Holdings
- Cara Therapeutics Inc.
- GW Pharmaceuticals Plc.
- Insys Therapeutics Inc.
- Therapix Biosciences Ltd.
- Zynerba Pharmaceuticals Inc.
And because the cannabis industry is rapidly growing and evolving, this list is expected to grow much longer as smaller marijuana and marijuana-related companies join larger companies that are already listed on the NASDAQ and NYSE.
The impending launch of U.S.-based cannabis ETFs
Additionally, with the expected launch of a variety of U.S.-based cannabis exchange-traded funds (ETFs) in the near future, it’s reasonable to assume that once these are available for general trading, investors will soon be able to trade them commission-free on Robinhood as well.
Robinhood hopes to expand future availability
- Foreign domiciled securities
- OTC equities
- Preferred stocks
- Tracking stocks
- Mutual funds
- Bonds and fixed income trading
- Foreign exchange
So, while opportunities for cannabis investors on the app are currently limited, the potential for an expansion of access in the future is promising given the company’s expressed desire to do so.
Bottom line for Robinhood cannabis investors
The unprecedented nature of the cannabis industry makes its future uncertain across many avenues, and the Robinhood app is no exception. However, given the exponential increase in cannabis interest and sales, it’s safe to assume that current cannabis companies will continue to grow and ultimately join bigger NASDAQ and NYSE companies, making them available on the app. That fact, coupled with Robinhood’s aims to increase securities support, makes the future of cannabis trading within the app promising, so investors would be smart to keep their eye on it. And playing with the handful of NASDAQ cannabis stocks currently available in Robinhood is a great way to dip your toe in the commission-free trading waters in the meantime.