Over the next decade, marijuana is on track to be one of the fastest growing industries. Although estimates vary wildly, worldwide sales could tally anywhere from $50 billion to $200 billion by the time 2030 rolls around. For context, global weed sales tallied just shy of $11 billion in 2018. It's this rapid growth of an already popular industry that has investors piling into pot stocks.

However, the cannabis industry isn't immune to that which plagues all next-big-thing investments. I'm talking about growing pains. To our north, regulatory issues have constrained supply and created huge bottlenecks. Meanwhile, in the U.S., high tax rates on legal product have made it difficult for licensed producers to compete with black-market growers on price.

August was a fantastic month for the broad market indexes. That wasn't the case for the cannabis sector, though. Two of the biggest cannabis-focused exchange-traded funds (ETFs) were down last month.

But there were some notable outliers. The three best-performing marijuana stocks in August delivered sizzling returns of 40% or more during the month. Here are those high-flying stocks -- and whether or not they're smart picks to buy now.

Legal marijuana entrepreneurs are finally starting to win the battle against a long-time enemy—the illicit market. For years, black market operators have undercut cannabis prices and taken away part of the cannabis market share.

But a new study has found that the coronavirus epidemic has accelerated the long hoped for reduction in the illegal market. The legal market has especially taken away business from Mexican drug cartels, according to a report from the Congressional Research Service.

What Will These Pot Stocks to Watch Look Like in the Long Term?

The investor landscape in cannabis keeps evolving. Big-name investors with deep pockets fairly recently caught on to the potential of fast-growing cannabis companies, opening up the possibilities for funding expansions or making changes to the business.

At the same time, high valuations dropped toward the end of 2019 and several companies reported layoffs and course corrections to finish out the year.

With valuations being less speculative in nature and larger and perhaps savvier investors becoming more active in this space, how can your company grab and hold their attention?

Some cannabis marketers look down on digital advertising, preferring the idea of building their brands without having to pay for clicks. Others believe that digital cannabis advertising isn’t even allowed.

Both notions are incorrect. First, brands that use digital advertising will be seen by many more eyeballs than purely organic marketing. Second, many forms of digital cannabis advertising are legally compliant in any state, and in some ways, these ads are actually less restrictive than the traditional advertising methods brands have frequently pursued instead. 

If you think the stock market has been taken on a wild ride, have a conversation with a cannabis stock investor. Over the past three years, they've probably witnessed their pot stock holdings double or triple in value, and then lose 50% or more of their value.

In early 2020, the world as we know it changed when COVID-19 erupted into a global health crisis. This virus continues to wreak havoc on public safety and the economy, sparing no community or industry. Despite these challenges, the cannabis industry has shown incredible resilience through these uncertain times. 

After being deemed “essential,” cannabis sales spiked. Many states approved temporary cannabis delivery models during shutdowns, a feature of the typical retail experience that was previously unavailable to most cannabis consumers. Now, after seeing the success cannabis businesses found while retailers in other industries suffered, many states are working to make those same e-commerce models permanent. 

The growth of physical retail space in the Canadian cannabis space remains inconsistent, but it is still moving in the right direction, BofA Securities said in a note.

The Analyst: Bryan Spillane details findings of the research firm's bi-weekly Canada cannabis retail store tracker.