For the first time ever, investors can buy a pure-play marijuana stock on a major U.S. stock exchange. Cronos Group (NASDAQ:CRON) has been been available in the past to U.S. investors over the counter. But that changed on Feb. 27, when Cronos Group began trading on the Nasdaq.

There are other marijuana-related stocks available on U.S. stock exchanges. GW Pharmaceuticals and Insys Therapeutics, for example, are marijuana-focused biotechs that trade on the Nasdaq. And Constellation Brands (NYSE:STZ), which owns nearly 10% of Canadian marijuana grower Canopy Growth, is listed on the New York Stock Exchange. However, Cronos Group is the first company on a U.S. exchange that actually produces and markets marijuana.

But how important is Cronos Group's listing on the Nasdaq? And is the marijuana stock a smart pick for investors?

Nasdaq printed in green letters with three upward-pointing green arrows above it

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Stepping up to the big leagues

Make no mistake: Cronos Group's listing on the Nasdaq is a significant achievement. It's akin to having a baseball player step up to the big leagues. The Nasdaq is the second largest stock exchange in the world, with an aggregated market cap of more than $8 trillion. The Toronto Stock Exchange (TSX), on which Cronos Group is also listed, is about one-fourth the size of the Nasdaq. 

On the other hand, Cronos Group stock's availability on the Nasdaq isn't as big of a deal as it is for other stocks that traded over the counter before moving to a stock exchange. Stocks that trade over the counter don't have minimums for market cap or rigorous disclosure requirements. A transition to the Nasdaq for such stocks provides an aura of legitimacy. It also helps investors, who can better assess companies' performance and prospects because of the required disclosure of detailed financial and operational information.

However, because Cronos Group was, and still is, listed on the TSX, the company already had to meet certain requirements. Among these requirements are timely disclosures of financial and other key operational information.

The bottom line is that it's a feather in the cap for Cronos to trade on the Nasdaq, but it's not quite the monumental leap that such a move is for other stocks. More than anything, the listing of Cronos Group on the Nasdaq is an important symbolic legitimization of sorts for the marijuana industry.

Canadian maple leaf next to marijuana buds and box of marijuana cigarettes

Image source: Getty Images.

Cronos Group's huge opportunity

Nasdaq or no Nasdaq, Cronos Group has a massive growth opportunity before it. The company ranks as one of the largest medical marijuana growers in Canada. Its sales have soared -- and so have its profits -- thanks to significant growth in the Canadian medical marijuana market.

Cronos also should be able to achieve impressive growth through the international medical marijuana market. The company claims an exclusive supply agreement with Pohl-Boskamp, which distributes products to over 12,000 German pharmacies. Germany claims one of the largest and fastest-growing medical marijuana markets in the world.

There are also other international opportunities. Cronos formed a strategic joint venture with Kibbutz Gan Shmuel, an which is based in Israel and already exports medical marijuana to 35 countries throughout Europe and Asia. In early February, the company launched a joint venture with NewSouthern Capital Pty Ltd. to market cannabinoid products to Australia, New Zealand, and Southeast Asia. 

The big prize dangling before Cronos Group right now is the coming legalization of recreational marijuana in Canada. Although legalization efforts have been delayed a bit, Cronos should be in position to sell recreational marijuana in its home country by September and perhaps a little sooner than that. Experts have estimated that the potential recreational marijuana market in Canada could be from $4.2 billion to as much as $12 billion annually. 

To buy or not to buy

Cronos Group stock has more than quadrupled in the last 12 months. Since it began trading on the Nasdaq, the marijuana grower's share price has jumped more than 20%. But is Cronos a buy? My view is that it depends on what kind of investor you are.

There are plenty of valid reasons for some investors to shy away from marijuana stocks. Among those reasons are risks and high valuations. However, the global marijuana market size is definitely increasing and doing so rapidly. I also think there's a strong case to be made that Cronos Group is in position to grab a significant share of that market. My take is that Cronos and other Canadian marijuana stocks are set to enjoy strong gains in 2018 and over the next few years. 

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.