Marijuana legalization is spreading throughout the United States, triggering a gold rush — or “green rush” — among investors seeking ways to profit from a growing cash crop.

California, Nevada, Massachusetts, Maine, Florida, North Dakota, Arkansas, and Montana this month approved measures to allow the medical or recreational use of marijuana. The drug remains illegal under federal law, presenting a risk that investors need to consider before buying stocks in the burgeoning industry.

Investor skittishness means than some marijuana-related stocks have been undervalued in comparison with their money-making potential. But that also makes them potential acquisition targets.

Golden Grail Technology (ticker: GOGY), Novus Acquisition & Development (NDEV), and Americann Inc (ACAN) are among the companies that investors can consider for investment.

GW Pharmaceuticals (GWPH), Insys Therapeutics (INSY), and Cara Therapeutics (CARA) are researching therapeutic effects of cannabis-derived substances. Meanwhile, over-the-counter stocks that have roared higher this year include Aphria (APHQF),...