This article was updated on May 30, 2017, and originally published on Dec. 3 2016.

The stock market is already risky business, but it's even more risky when you're talking about emerging markets, such as the burgeoning marijuana marketplace.

Following the U.S. elections on Nov. 8, 29 states and D.C. have passed laws legalizing the use of the marijuana plant for medical purposes, and eight states have passed recreational-marijuana laws. Marijuana legalization offers significant tailwinds for marijuana stocks, but not all marijuana stocks will be winners. In fact, many marijuana stocks are likely to be losers, especially those that trade over the counter, where oversight is lax.

Although no one has any idea where marijuana stocks will be heading in one month, one year, or five years, I view GW Pharmacueticals (NASDAQ:GWPH), Aphria, Inc. (NASDAQOTH: APHQF), and Insys Therapeutics (NASDAQ:INSY) as three of the most intriguing marijuana stocks right now. Read on to see how I'm currently ranking these three stocks on the risk spectrum.

An Aphria marijuana grow facility full of flowering marijuana plants.


Less risky marijuana stock: GW Pharmaceuticals

It's tempting to invest in marijuana growers and dispensary stocks, but a better idea may be to focus on "backdoor" marijuana companies that benefit from growing awareness of marijuana's benefits without the risk of falling into the crosshairs of U.S. Attorney General Jeff Sessions, who has historically been an adversary of legalization.

One of my favorite backdoor marijuana stocks is GW Pharmaceuticals. It's working on marijuana medicine that could win FDA approval, and that blessing could allow it to rack up big sales and profit while sidestepping any future federal crackdown on marijuana dispensaries.

GW Pharmaceuticals is developing medicines based on marijuana's chemical cannabinoids, and it appears to be on the cusp of winning an FDA green light for its CBD-based anti-epileptic drug, Epidiolex. In 2016, GW Pharmaceuticals reported results from placebo-controlled trials showing Epidiolex reduces monthly seizures by about 40% from baseline in patients with Dravet syndrome and Lennox-Gastaut syndrome, two rare forms of epilepsy.

Management is putting together its application for Epidiolex's FDA approval, and if regulators agree it can play an important role in treating epilepsy, then this drug could become a top-selling medicine. Industry watchers' peak sales estimates for the drug vary, but pessimistic views still target it as a nine-figure opportunity. If Epidiolex's sales end up anywhere near there, then this company has a good shot at turning a handsome profit for investors.

Of course, there's no guarantee that the FDA will approve Epidiolex or that doctors will prescribe it. Furthermore, Epidiolex will compete with CBD-heavy strains of marijuana sold at medical-marijuana dispensaries, so this is far from a risk-free investment.

A marijuana grow facility in operation at GW Pharmaceuticals.


More risky: Aphria, Inc.

Another way to avoid stocks that could run afoul of the U.S. government is to look across the border to Canada, where the medical-marijuana market is growing rapidly, and recreational marijuana will soon be legalized.

One Canadian marijuana stock worth considering is Aphria, Inc., a medical-marijuana play that trades on the TSX Venture Exchange but can also be bought via ADRs issued by U.S. banks in the United States.

I think there are three big reasons why it might pay-off to buy Aphria's shares. First, Aphria's already making money serving the medical marijuana market. Second, its modern facilities mean it has some of the lowest-cost production in the industry. And third, CEO Vic Neufeld has already proven himself to be a shareholder-friendly leader, having run Jamieson Laboratories Ltd for 20 years before selling it for $300 million in 2014. 

Neufeld's plans include significant marijuana volume growth via a $24.5 million project to triple the size of its marijuana production. On Nov. 30, the company completed a Canadian stock offering, generating gross proceeds of $40.2 million Canadian that will be used to fund his expansion efforts.

In the three-month period ending November, Aphria's sales were $3.9 million (translated to U.S. dollars), up from $3.3 million in the prior quarter. The company's net income was $702,000.

Undeniably, increased investments in production, distribution, and marketing, as well as future dilutive stock offerings, could take a toll on earnings, but I think the opportunity for recreational marijuana in Canada is big enough to offset some of this risk, and the right management is in place to execute on this opportunity.

Marijuana in production at Aphria's facility.


Most risky: Insys Therapeutics

Insys Therapeutics already sells Subsys, which is one of the most prescribed fentanyl painkillers on the market. The company is also debt-free and profitable. So why is this stock a "most risky" marijuana investment?

Simple: It's been steeped in controversy since 2014, when news began swirling of investigations into the company's marketing of Subsys. Since then, the company's president has been replaced twice, and former sales executives have been arrested. To make matters worse, investigations that could result in costly settlements are ongoing.

Insys has also been weighed down by declining demand for Subsys over growing worry of opiate abuse. In the first quarter, sales were only $36 million, down from $60 million one year ago, and as a result, the company lost $0.09 per share, down from a $0.03 gain in Q1 last year.

The company's struggles have taken a lot of the shine off what could otherwise be an intriguing marijuana story. Insys is launching a reformulation of the long-standing THC drug Marinol, and that drug, Syndros, could have nine-figure sales potential because it's more easily dose-adjusted. The company has also said it's working on its own CBD therapies for epilepsy that could eventually allow it to compete against GW Pharmaceuticals. 

Overall, Insys Therapeutics' marijuana catalysts make it an intriguing stock, but the Subsys overhang makes this company's future quite uncertain. If Insys Therapeutics can put the Subsys saga behind it, then this stock becomes less risky, but until then, it remains a case of "buyer beware."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.