This article was updated on Jun. 6, 2017, and originally published on Jan. 29, 2017.

Florida is undeniably behind the curve when it comes to passing pro-pot legislation, but the Sunshine State did make up some ground in November, when voters legalized medical marijuana in the state. How big could the medical marijuana market be in Florida for marijuana stocks? Read on to find out.

Getting on board

While Florida's been dragging its feet in passing medical marijuana laws, Americans' attitudes toward marijuana have been steadily improving.

Marijuana buds sit on a table beside an open prescription bottle.

Image source: Getty Images.

According to Gallup polls, more Americans support marijuana legalization than ever before, and Americans' view of medical marijuana is even more favorable. Because of improving attitudes, 25 states had passed medical marijuana laws before 2016, and three more states passed medical marijuana laws in Nov. 2016, including Florida.

Pro-pot advocates' victory in Florida significantly expands medical marijuana's use beyond earlier efforts in 2014 that legalized low THC products for compassionate use.

Small steps, right direction

Florida will allow greater use of medical marijuana following November's vote, but the list of approved indications for it falls shy of what's been approved in other states. For instance, Florida doesn't allow the use of medical marijuana for chronic pain, but Arizona does.

As a result, medical marijuana sales in Florida may trail sales in other states with smaller populations with wider-ranging laws. Nevertheless, the medical marijuana market in Florida should still be big because of a large population of seniors requiring care.

Florida's Department of Health is drafting guidelines that will establish a medical marijuana market by mid-2017, and after those guidelines are complete, licenses will be issued, and sales will begin, likely in 2018. While sales will likely be small initially, they could grow significantly over the next few years, according to Matt Karnes, founder of GreenWave Advisors, LLC.

Karnes expects Florida's medical marijuana market will be worth $85 million in 2018, but that it could grow to $705 million in 2021.

A chart showing how Florida's medical marijuana market will grow from $85 million in 2018 to $705 million in 2021.

Data source: GreenWave Advisors, LLC. Author's chart.

Investing in marijuana stocks

The potential to profit from Florida's medical marijuana market is enticing, but investors have few investment options they can buy right now.

Most marijuana stocks that could benefit from ramping demand in Florida are small companies that are trading on over the counter markets, which are risky, unregulated exchanges prone to fraud. For that reason, the majority of marijuana stocks are best left untouched by most investors.

Instead, investors interested in buying marijuana stocks might want to consider backdoor marijuana stocks that don't benefit directly from sales in Florida, but will benefit from improving attitudes toward cannabis.

Among the most intriguing of these companies are Canadian medical marijuana stocks Canopy Growth (WEED) (CGC 2.04%) and Aphria, Inc. Canada's already got a national medical marijuana market, and it could soon put in place a national market for recreational marijuana too.

For instance, to profit from growing demand in Canada, Canopy Growth's is developing the brand Tweed and it's inked a partnership with cultural icon Snoop Dog on his Leafs by Snoop.

So far, Canopy Growth's sales are small, but they're growing quickly. In Q4, unaudited revenue was $9.7 million Canadian, up from CAD$3.5 million the year before, and profit was CAD$0.02 per share. The company's investments to expand its business, however, could mean profit swings wildly in the future, or that profits turn to losses. With a market cap of nearly $1 billion, investors may already be pricing in a lot of its potential growth.

Instead, investors might want to consider biopharmaceutical companies that are working on marijuana medicine, such as GW Pharmaceuticals (GWPH), a U.K. drugmaker.

GW Pharmaceuticals is developing Epidiolex, a purified CBD that in scientifically controlled clinical trials has reduced seizures by about 40% in rare forms of childhood epilepsy.

Industry watchers believe if Epidiolex wins FDA approval, it could have nine-figure sales potential. GW Pharmaceuticals hopes to file for approval soon, and if so, then an FDA decision could come later in 2017, or early in 2018.

According to management, roughly one-third of the 470,000 children who suffer from epilepsy receive inadequate relief from existing medications, and therefore, there's a big opportunity to fill this big unmet need. That being said, GW Pharmaceuticals' shares aren't cheap, and the company's got very little revenue coming in, so it's losing money every quarter.

With a market cap of $2.4 billion, investors are already pretty optimistic about GW Pharmaceuticals, but there's no guarantee Epidiolex nets an FDA approval, or that if approved, it becomes a top seller. Because of that, investors should approach this company cautiously, despite Epidiolex's potential.