Whether you're ready or not, the marijuana industry is budding before our eyes. Leading cannabis research firm ArcView has estimated that the North American market could grow sales by an average of 26% annually between 2016 and 2021, leading to nearly $22 billion in annual sales. This growth, coupled with growing favorability toward pot among the public, is a big reason why marijuana stocks have soared.

Canada's maple leaf may soon turn green

However, not every cannabis market is necessarily thriving if you dig below the surface. Despite rapidly growing sales in the U.S., pot-based businesses aren't exactly flourishing. The U.S. federal government has dug in its heels and refuses to alter its Schedule I classification of cannabis, meaning it's entirely illegal, prone to abuse, and recognized as having no medical benefits. This classification makes life extremely difficult for U.S.-based marijuana businesses, and even medical patients. And, to boot, Attorney General Jeff Sessions is doing everything imaginable to wage war on the cannabis industry and halt its expansion.

Cannabis buds next to a piece of paper that says yes, lying on dozens of miniature Canadian flags.

Image source: Getty Images.

Meanwhile, Canada has laid out a blueprint for pot progressivism. Having already legalized medical marijuana back in 2001, Canada's federal government is currently reviewing legislation that would make adult-use weed legal by this coming summer. A Senate vote is scheduled for June 7, with the expectation that adult consumers could legally buy cannabis in dispensaries by August or September, if approved. Legalization could mean an additional $5 billion in annual sales, which is a big reason why investors are blinded by dollar signs at the moment.

If you're looking to get your feet wet by investing in marijuana stocks, Canada is the place to be right now. Growers are expanding their capacity as quickly as their balance sheets will allow, while investment companies are busy diversifying their cannabis assets throughout Canada.

A marijuana first: This Canadian pot stock just uplisted to the Nasdaq

Yet, one drawback of Canada's cannabis success, at least for U.S. investors, has been the need to turn to the over-the-counter (OTC) market, which is where Canadian pot stocks are usually listed, in order to take advantage of this expected legalization and industry expansion. While the OTC boards have made significant regulatory strides over the past decade, liquidity, and access to up-to-date financial information, can occasionally be challenging. That's why most institutional and seasoned investors prefer to keep their money on reputable exchanges, such as the NYSE or Nasdaq (NDAQ 0.59%).

The Nasdaq big board in studio.

Image source: Nasdaq.

However, cannabis investment firm Cronos Group (CRON -2.88%) is pioneering a shift that could get more Americans involved in the Canadian green rush. On Feb. 27, Cronos Group uplisted from the Nasdaq International Designation program, where it traded under the "PRMCF" ticker symbol, to the Nasdaq Global Market. It now can be found under the "CRON" ticker symbol. Though there are other cannabis companies listed on the Nasdaq Global Market, such as cannabinoid-drug developer GW Pharmaceuticals, Cronos becomes the first Canadian marijuana stock to have uplisted from Nasdaq International, and it wouldn't be surprising if others followed suit.

Said Mike Gorenstein, CEO of Cronos Group, "This up listing to NASDAQ is a major corporate milestone and reflects the significant progress we have made in strengthening our corporate governance and expanding our global footprint. We believe this will increase long term shareholder value by improving awareness, liquidity, and appeal to institutional investors." 

Here's what really matters for Cronos Group

However, uplisting to the Nasdaq, and appearing more palatable to institutional investors, is nothing more than a short-term driver for Cronos Group. If its market cap is to move significantly higher, we're going to need to see its business model pay off.

A bottle of cannabis oil next to cannabis leaves.

Image source: Getty Images.

Unlike traditional weed growers that are intricately involved in their day-to-day operations, Cronos Group has taken the role of principal investor, with three core assets. It has complete ownership of Peace Naturals and Original BC, and owns 21.5% of Whistler Medical Marijuana Company. All of these assets focus on medical cannabis, but can presumably switch their focus to include recreational weed, if approved. Additionally, Whistler Medical Marijuana and Peace Naturals generate significant sales from cannabis oils, which are a considerably higher price and higher-margin product. In short, legalization does matter for Cronos, as does the ability of its core assets to produce and sells cannabis oils. 

Furthermore, Cronos has access to a number of international markets. Aside from its Canadian core assets, it exports to Germany, giving it a path to more than 12,000 pharmacies; it's building a production facility in Israel in a joint venture with Kibbutz Gan Shmuel; and it has an avenue into the Australian market through a licensed joint venture with NewSouthern Capital. This should help create some geographic revenue diversity and reduce any potential hiccups in cannabis demand.

Though I appreciate Cronos's unique investment approach, rapid sales growth, and Wall Street's expectation that it'll be marginally profitable in fiscal 2018, I struggle to overlook its nearly $1.5 billion market cap. Even with the potential for robust margins, this is an aggressive valuation that'd I'd probably suggest investors pass on for now.