Before fully committing to purchasing marijuana/hemp penny stocks online, it is important to make sure that you have considered all of the potential challenges and risks posed by entering the market, such as:
Potential loss due to scammers: TimothySykes.com says “There are a large number of people in the marijuana/hemp industry that are so eager to make money such that they will attempt to scam innocent investors.” The Securities and Exchange Commission has intervened in places, warning buyers of the possibility of investment fraud (these could be anything like unsolicited offers, unlicensed sellers, etc) and any manipulation of the market such as fake press releases and deliberate trading interruptions – all with the goal of influencing prices.
Foreign stocks: Since Marijuana/Hemp is now legal nationwide in Canada, the large majority of marijuana/hemp companies that are trading in the U.S. are Canadian. As a result of the Canadian legality, these companies have had the chance to grow and develop, meaning that they are some of the largest. When an investors is looking to make abroad ventures in their portfolio, there are some associated risks, such as accessibility to financial data being more difficult (obtaining documents such as company reports etc) than it would be in the U.S. One should also bear in mind that there is every possibility of no legal dispute being held up in the event that an investment turns out to be fraudulent.
Possibility of lack of advice/help: Because marijuana/help is illegal federally in the U.S a lot of banks are reluctant to go anywhere near the industry. As a result of this, some professionals in investment such as portfolio managers and financial advisors, will be unable to recommend marijuana/hemp penny stocks to their client.
To buy in marijuana/hemp penny stocks online you will need to open a brokerage account. There are many brokers available, but when looking for one specifically for marijuana/hemp penny stocks, it is still important to take the normal precautions that you should when looking for a broker for investing in regular penny stocks:
No additional charges for low-prices stocks: Some brokers will advertise their apparently “excellent/standard” transaction fees as part of their marketing, but avoid telling you that there are often added costs to low-priced stocks.
Not unreasonable volume restrictions: Any site that charges either for large trades, or demands that you split them up into multiple orders is not useful for penny stock investment
No Costly Add-Ons: due to the often aggressive nature of penny stock investing, a lot of sites demand that you upgrade to products such as premium accounts – these tend to be laden with additional platform fees and higher minimum balances. Some require that you place telephone order to a human broker, which can often result in high unexpected service charges.
Low Minimum Account Balance: It is essential when looking for a site to buy marijuana/penny stocks that it has a low initial account minimum balance. Due to the unpredictable nature of these penny stocks investments, it is not uncommon for penny stock traders to see their initial investment shrivel at a rapid rate – in other words, it is important that low minimum balance requirements are not just an offer on sign-up, but remain, in the event of a trade going wrong.
In summary, after you have taken these precautions and selected a site, you must open your brokerage account – similar to opening a bank/savings account.