How to Buy OTC Cannabis Stocks

OTC (Over-the-Counter) Markets are decentralized trading venues where securities not listed on major exchanges like NYSE or NASDAQ are bought and sold. OTC Markets Group operates three tiers: OTCQX (highest standards), OTCQB (venture market), and Pink (open market with minimal requirements).

The cannabis industry has a unique relationship with OTC markets. Because cannabis remains federally illegal in the United States, most US cannabis companies cannot meet the listing standards of major exchanges — not due to size or financials, but because their core business involves a Schedule I substance. This means some of the largest, most profitable cannabis companies in the world trade on OTC Markets.

Cannabismarketcap tracks 65 cannabis stocks on OTC Markets with a combined market capitalization of $8.73B. This includes multi-billion-dollar MSOs alongside micro-cap speculative companies.

Buying OTC cannabis stocks is straightforward but requires a brokerage account that supports OTC trading. Here is a step-by-step process:

Step 1: Open a Brokerage Account. Choose a broker that supports OTC trading (see comparison below). Most major brokers allow OTC trades, but some charge additional fees. Robinhood does not support most OTC cannabis stocks.

Step 2: Fund Your Account. Transfer funds via ACH, wire, or check. Note that some brokers may require your deposit to clear before allowing OTC trades.

Step 3: Search for the Ticker. Enter the stock's OTC ticker symbol (e.g., CURLF, GTBIF, TCNNF). Some brokers require you to search by company name if the ticker does not auto-populate.

Step 4: Use Limit Orders. Always use limit orders for OTC stocks, never market orders. OTC spreads can be wide, and a market order may execute at a significantly worse price than expected. Set your limit price based on the current bid/ask spread.

Step 5: Confirm and Monitor. After placing your order, confirm it was filled at or near your limit price. OTC orders may take longer to fill than exchange-listed stocks due to lower liquidity.

The following brokers are commonly used for OTC cannabis stock trading:

Every cannabis stock trading on OTC Markets tracked by Cannabismarketcap. Sorted by market capitalization.

Wider Bid-Ask Spreads: OTC stocks typically have wider spreads than exchange-listed stocks. A spread of 1-3% is common for large-cap OTC cannabis stocks, while micro-caps can have spreads of 5-20%. This is an implicit cost of trading that reduces your returns.

Lower Liquidity: Even large MSOs trading on OTC may have lower daily trading volume than similarly-sized exchange-listed companies. This means large orders can move the price, and exiting a position quickly may require accepting a lower price.

Settlement (T+2): OTC trades settle on T+2 (two business days after trade date), the same as exchange-listed stocks. However, some brokers may hold funds or restrict trading until settlement completes.

Market Hours: OTC Markets operate during regular US market hours (9:30 AM - 4:00 PM ET). Pre-market and after-hours trading is generally not available for OTC stocks.

Canadian Dual Listings: Many cannabis companies trade on both OTC Markets (US) and the CSE or TSX (Canada). The Canadian ticker may have better liquidity in some cases. Check whether your broker supports Canadian exchange trades, which may offer tighter spreads.