Despite its explosive gains over the past few weeks, the marijuana industry, in many ways, is still in its infancy. Medical and recreational cannabis sales are forecast to climb to a monstrous $146.4 billion by the end of 2025, according to Grand View Research. Legal marijuana is thus on pace to eclipse both the soda and tobacco industries in terms of value in the next decade. 

Even so, investors in this nascent industry still face two major challenges. First off, the top Canadian pot stocks listed on major U.S. exchanges -- Canopy Growth Corporation (CGC -0.91%), Cronos Group (CRON 0.22%), and Tilray (TLRY) -- all sport valuations that seem to suggest that much of this projected upside is already baked in at this point.

The second problem is that the remaining players typically trade on either the less liquid Toronto Stock Exchange or on over-the-counter markets that don't require stringent financial reporting. 

A person holding up a marijuana leaf against a blurry background of a town.

Image source: Getty Images.

So where can long-term-oriented investors park their capital to participate in this powerful emerging trend? Well, the best opportunities at this point are probably in this second category of pot stocks -- those that have yet to list on a top U.S. exchange. While risky, there are a handful of promising cannabis stocks on these exchanges tied to legitimate and thriving businesses.  

Keeping with this theme, MariMed Inc. (MRMD -3.50%)and OrganiGram Holdings (OGI) are two names in this group that arguably stand out from the crowd. 

Right place, right time

Even without legalization at the federal level, a stunning 73% of the legal pot market is still expected to emanate from the United States all the way out to 2022. And if President Trump or his successor spearheads a movement to change federal policy, the U.S. marijuana market could explode higher in terms of value over the next decade.

Investors on the hunt for compelling growth opportunities in the cannabis space might therefore want to own at least one U.S.-based company. Although there are several to choose from at the moment, MariMed is arguably one of the most attractive for a few reasons.

MariMed is a small-cap company with two core businesses. On the one hand, it acts as a professional management firm that advises clients on both how to obtain cannabis licenses and how to develop and manage state-of-the-art grow/distribution facilities. Boiling this statement down, MariMed is essentially a real estate company that helps would-be growers get off on the right foot from a compliance standpoint.  

Its second line of business is its growing portfolio of dried flowers, cannabis-infused products, and disposable vape pens. To this end, the company acquired Betty's Eddies for its precision-dosed fruit chews last year and has since expanded its distribution of Lucid Mood vape pens as well. 

The big headline here is that MariMed could be at the right place at perhaps the perfect time. If the U.S. legalizes marijuana at the federal level in the next decade as many suspect, MariMed should be big winner due mostly to its two-pronged approach to business development.  

An overlooked name

While Canadian growers like Canopy, Cronos, and Tilray have watched their stocks soar this year, OrganiGram has lagged behind somewhat with a more modest 71% gain year to date. The good news is that OrganiGram could catch up to its large-cap peers soon for two reasons.

Firstly, OrganiGram is rapidly expanding its production capacity. So much so that the company could end up becoming a top five Canadian producer by year's end, eclipsing Cronos and Tilray in the process. That's certainly an interesting trend, given that OrganiGram's $700 million market cap is currently dwarfed by both Cronos' and Tilray's. 

Adding fuel to the fire, OrganiGram is also expanding into overseas markets in both Australia and Germany at the moment. This international footprint could prove to be a key stepping stone toward a partnership with either a large-cap beverage maker or perhaps a top tobacco company down the line. 

Lastly, OrganiGram has kept its balance sheet in fairly respectable shape -- even while its aggressive expansion plan takes shape. At last count, the company had $74 million in debt and $117 million in cash. Those two key financial figures compare exceedingly well against most other Canadian pot companies right now.  

Time to buy?

OrganiGram is arguably a screaming buy here simply because it should benefit tremendously from the legalization of recreational pot in Canada this October. The company, after all, should be able to stand toe-to-toe with most of its closest competitors from a production standpoint.

MariMed, on the other hand, is probably only worth buying if you are willing to be patient. The company's true value proposition won't come to fruition until the U.S. modifies its cannabis policy at the federal level. Unfortunately, federal prohibition seems unlikely to unravel overnight.

In all, MariMed and OrganiGram are both deeply undervalued relative to the enormous growth prospects of the legal pot market over the next two to three decades. As a result, these two underappreciated names might turn out to be outstanding buys for patient investors.