This article was updated on Dec. 9, 2017, and originally published on July 11, 2017.

Only 80 authorized licenses have been given to suppliers of medical marijuana in Canada. Canopy Growth Corporation (NASDAQ:CGC) holds five of them. Canopy Growth is also the largest Canadian marijuana stock, with a market cap of nearly $5 billion -- higher than that of rival Aurora Cannabis (NASDAQ:ACB) and nearly twice that of Aphria (NASDAQOTH: APHQF).

But is Canopy Growth a marijuana stock that investors should buy now? Here are three things you need to know first before making a decision. 

Marijuana leaf being held with marijuana plants in background

Image source: Getty Images.

1. Sales are soaring -- and so is the stock

Business is booming for Canopy Growth. The company reported its 2017 fiscal year and fourth-quarter results on June 27. Sales for the year totaled $39.9 million -- up a whopping 214% compared to the previous year. Although growth is slowing somewhat, it's still quite impressive: Canopy Growth posted fiscal 2018 second-quarter revenue of $17.6 million, a 107% year-over-year increase.

For much of 2017, Canopy Growth stock kind of muddled along. However, since September the stock has shifted into high gear. A major catalyst occurred on Oct. 30, 2017, with Fortune 500 alcoholic beverage maker Constellation Brands (NYSE:STZ) announcing that it was partnering with Canopy and buying a 9.9% stake in the marijuana grower for $245 million. The deal brought tremendous attention to Canopy Growth. 

With the big Constellation partnership serving as a tailwind, Canopy Growth stock is now up more than 120% year to date. Unless something happens to drag the stock down, the company appears to be on track for its second consecutive year of triple-digit percentage gains.

Opportunity highway sign

Image source: Getty Images.

2. Opportunities are great

While Canopy Growth's sales are growing in the Canadian medical marijuana market, that could be merely the tip of the iceberg for the company's potential. Canopy Growth has already begun to expand into international markets, including Australia, Brazil, Chile, and Germany.

The German market is especially promising. Germany legalized medical marijuana effective March 2017. However, the country is importing all medical marijuana until it can establish a state-regulated program for internal production. With a population of more than 80 million, Germany presents a large potential market for Canopy Growth.

Then there's the likelihood of a much bigger market right at home. Canadian Prime Minister Justin Trudeau is committed to deliver on a campaign promise to legalize the recreational use of marijuana. His goal is for this legalization to be effective in July 2018. 

Assuming nothing derails Trudeau's efforts, it would present another great opportunity for Canopy Growth. Professional services firm Deloitte projects that the retail market for marijuana could be between $4.9 billion to $8.7 billion annually. 

Risk ahead street sign

Image source: Getty Images.

3. Risks are great, too

While the opportunities for Canopy Growth are indeed great, so are the risks that the company faces. One risk is that the timeline for Canada's national legalization of recreational marijuana could be pushed back. This risk appears to be decreasing, though.

It's also possible that Canopy Growth could see its sales in Germany decrease once the country sets up its program for native marijuana growers. However, it's unknown how long the process will take for the German government to establish the program. Also, Canopy's acquisition of German distributor MedCann (now known as Spectrum Cannabis) in 2016 should help the company maintain its presence in Germany. 

In the meantime, other Canadian marijuana growers are eyeing the German market. Aurora Cannabis acquired a leading German wholesale importer in May. Aphria has also indicated interest in selling medical marijuana in Germany.

These issues are relatively small, though, compared to the biggest contributor to risk for Canopy Growth: The stock is super expensive right now. Shares trade at nearly 76 times sales. That's beyond nosebleed level. This stratospheric valuation has a lot of growth baked into the price of the stock. If there are any hiccups in that growth, Canopy Growth investors could feel the pain. 

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.