Canadian weed stock is starting to look very attractive to Americans as Canada gets closer and closer to federal cannabis legalization. Adult use sales are expected to begin in Canada sometime this summer. Many international cannabis brands like MedMen, Aurora, and Aphria are traded on the Canadian market. But how can Americans get in on this green rush? We spoke to a couple marijuana market experts to fully explain how Americans can invest in Canadian weed stock.
Can Americans Buy Canadian Weed Stock?
Yes. Americans can buy any Canadian stock, weed stock or otherwise. Although, not all stockbrokers will deal with Canadian weed stock or international stocks in general. Debra Borchardt, marijuana market expert and co-Founder of the Green Market Report explains:
“Most Americans trade through online sites like Fidelity, Ameritrade or Scottrade, but these don’t necessarily allow for trading Canadian stocks. Investors that prefer the Canadian listings will need to look to companies like Interactive Brokers, Q Trade or Penn Traders to name a few. There are more and you may want to compare commissions and minimum account sizes.”
Many Americans buy and sell Canadian weed stock on sites like Scottrade, but if you’re looking to start an account to invest exclusively in Canadian or international stocks, look at sites like InteractiveBrokers, which is one of the most popular U.S. brokers for international trade.
Like Borchardt mentioned, which site you choose will depend on what you can afford and which companies you’re looking to invest in. While InteractiveBrokers requires a minimum of $10,000 to open an account, they charge a low fee to trade. Scottrade, on the other hand, only requires $2,500 to open an account, but charges a $6.95 commission on every trade. So do your homework before opening any old account to buy Canadian weed stock.
Is it a Good Time to Invest in Canadian Weed Stock?
Canada is about to fully implement their “recreational” cannabis market, making weed 100 percent legal to buy at a licensed dispensary for adults. They will be the second nation to do so after Uruguay, and the first G7 nation to do so. Many are hopeful that the Canadian marijuana market will grow rapidly and Canadian weed stock will be a good investment but is it a good time to buy?
“I think now is a good time to make purchases in select Canadian stocks,” says Borchardt. “Technically, since April, Canadian stocks have bounced up and down, but the lows over the last three months in the Canadian cannabis stock index by MJIC have been sequentially higher. Also, once these companies begin reporting their sales results from the new adult use consumers, I would expect the stocks will trade higher on those positive headlines.”
Plus, some Canadian cannabis companies already have their eyes set on the bigger picture: international cannabis trade. “Canadian import/export could be a massive market driving big revenue and consolidation in the industry,” says Wil Ralston, President of SinglePoint (OTCQB:SING), a company that specializes in acquisitions of small to mid-sized “new-technology” businesses. Therefore, getting in on the action now, while things are still on the ground floor, might reap the greatest reward down the line.
Anything Else to Consider When Shopping for Canadian Weed Stock?
When considering investing in Canadian weed stock as an American, there are two other things to consider. First, you will have to buy and sell Canadian weed stock in Canadian dollars, so you’ll want to check the exchange rate. The value of the American dollar fluctuates relative to the Canadian dollar, so it’s important to keep an eye on it to make sure you’re exchanging money at an ideal time.
Second, it’s important to note that Americans may have to pay foreign taxes on Canadian weed stock capital gains. While there are protections in place between the U.S. and Canada to help investors avoid double taxation, that may require extra paperwork during tax season.
Final Option: Over-the-Counter (OTC) Markets
Buying Canadian weed stock isn’t the only way to invest in the legal cannabis industry. Many cannabis companies are traded in the U.S., just not on the New York Stock Exchange (NYSE) or NASDAQ. Instead, many American cannabis brands and Canadian cannabis companies are listed on the OTC markets.
This is one way to buy weed stocks without dealing with the Canadian market, exchange rates, and taxes. Regardless of which route you choose, it’s never been a better time to invest in cannabis. Here are the top 5 Canadian weed stocks to watch now.
By: Michelle Janikian, Herb