The historic year for marijuana stocks marches on. While you're probably familiar with the biggest event of the year -- the legalization of recreational cannabis in Canada -- a lot more history has been made than just this occurrence.

For instance, Vermont became the first U.S. state to legalize adult-use marijuana entirely through the legislative process in January (i.e., without putting the measure to a vote of state residents). We also saw GW Pharmaceuticals becoming the first drug developer to get a cannabis-derived therapy approved by the U.S. Food and Drug Administration on June 25. This cannabidiol-based oral solution known as Epidiolex also received the lowest possible classification (Schedule V) for a controlled substance, per the U.S. Drug Enforcement Agency.

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Uplisting to reputable U.S. exchanges has become the "next big thing"

However, what's quietly become one of the biggest trends this year is pot stocks that have uplisted from the over-the-counter (OTC) exchange to more reputable U.S. or Canadian exchanges.

Why uplist? While the OTC exchange has done an admirable job of boosting reporting and listing standards, they're still not as strict as, say, the New York Stock Exchange (NYSE) or Nasdaq.

Perhaps more important, not all financial institutions will invest in companies that trade on the OTC exchange. This limits trade volume, analyst coverage, and potentially even interest in marijuana stocks. By moving from the OTC exchange to a more prominent exchange, these companies are demonstrating that the cannabis industry is a legitimate business model, and that they meet the requirements for listing right alongside time-tested businesses. These companies also hope it'll translate into positive analyst coverage, increased investment, and improved trading liquidity, all three of which are not guaranteed on the OTC exchange.

Interestingly, Canadian-listed marijuana stocks aren't allowed to list on the Toronto Stock Exchange, while U.S.-based pot stocks can't list on the NYSE or Nasdaq. Thus, Canadian marijuana stocks have looked south of the border to get institutional exposure, while U.S.-based companies such as MedMen Enterprises have listed in Canada.

A tipped over jar filled with trimmed cannabis buds lying atop a small pile of cash bills.

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These five marijuana stocks have all uplisted to the Nasdaq or NYSE

To date, five Canadian marijuana stocks have chosen to move their listing to one of the two major U.S. exchanges.

  1. Cronos Group (CRON 1.28%): Cronos Group became the first pot stock to uplist to a major exchange, in this case the Nasdaq, at the end of February. Expected to be a top-10 producer when at peak capacity, Cronos in July announced a joint venture with a group of investors that'll allow the construction of an 850,000-square-foot greenhouse capable of 70,000 kilograms of annual yield.
  2. Canopy Growth Corp. (CGC -1.25%): Canopy Growth was planning to be the first pot stock to uplist in October 2017. Those plans changed when it received the first of what would become three investments from alcoholic beverage giant Constellation Brands. With Tweed, arguably the best known cannabis brand; superior sales channels; and production capacity that'll probably rank second overall, at around 500,000 kilograms per year at peak capacity, Canopy Growth has certainly benefited from its increased exposure.
  3. Tilray (TLRY): Though Cronos beat Tilray to the punch of listing on the Nasdaq, Tilray still made history by becoming the first Canadian marijuana stock to go the initial public offering route in the United States. Currently laying the foundation for its international expansion and capacity growth, Tilray is likely to become a top-five producer within the next three years.
  4. Aurora Cannabis (ACB): In October, Aurora Cannabis uplisted to the NYSE with the clear intent of attracting long-term investors. Aurora Cannabis is widely expected to be the leading producer by volume in Canada. Inclusive of its ICC Labs acquisition, and the 1.1 million square feet of capacity ICC is developing, Aurora Cannabis should easily surpass 600,000 kilograms in annual production. In other words, it very much deserves its NYSE listing.
  5. Aphria (APHA): Last, but not least, Aphria uplisted to the NYSE just days ago. Aphria projects to slide in as the No. 3 grower by annual yield, with an estimated 255,000 kilograms. Aphria's focus on alternative cannabis products, including its under-construction extraction center for concentrates, should play a big role in lifting its operating margin and making the company profitable.
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Something to keep in mind

Of course, investors should also understand that uplisting to a reputable exchange is just a baby step in the grand scheme of things for marijuana stocks. Sure, it'll give these companies more visibility and perhaps land them institutional investors, but it's not a needle mover when it comes to their production or profitability.

Possibly the biggest takeaway for investors has to be that it's going to take time for this industry to mature. For example, investors are excited that Aurora Cannabis, Canopy Growth, and Aphria will potentially produce up to 1.4 million kilograms in aggregate annual yield at their peak. Yet at the moment, these companies are generating an annual run rate of only 120,000 kilograms, combined. This production isn't going to simply appear overnight, so patience is going to be recommended for investors.

Likewise, profits could still be a way out for these pot stocks. Tilray, as noted, is expanding its production capacity and looking to foreign markets for opportunities. The same can be said for Canopy Growth, which is expected to use its cash hoard to advance international sales and make acquisitions. That means neither company is a good bet to be profitable in fiscal 2019, even if sales take off, as expected.

The push to uplist remains a nice story for marijuana stock investors, but it's not a reason to alter your investment thesis on these stocks.