The beginning of the year has been interesting for the marijuana industry, to say the least. Pretty much no group of stocks has performed better than pot stocks, with a dozen well-known weed stocks advancing by at least 77% in the first quarter. The expectation that global marijuana sales will grow by 38% in 2019, and more than double between 2018 and 2022, clearly has investors excited about the green rush.

The cannabis industry's near-term outlook isn't so green

And yet, it was also a quarter marred by disappointments for the legal cannabis industry. Legalizations in New Jersey and New York, which had looked like near-certainties as recently as a few weeks ago, are now on hold. More importantly, a combination of regulatory red tape and packaging constraints in Canada has seriously reduced finished marijuana supply for sale to the recreational marketplace. In fact, aggregate sales in cannabis stores fell nearly 5% in January 2019 from the sequential month.

A cannabis leaf laid within the outline of the red maple leaf of the Canadian flag, with two rolled joints and a cannabis bud laid to the left of the flag.

Image source: Getty Images.

Because Canada is contending with supply chain issues, most pot growers have seen their consensus forward-year profit projections (this might be for fiscal 2019 or fiscal 2020, depending on the company and their calendar year) decline over the past three months.

For example, CannTrust Holdings delivered its fourth-quarter and full-year operating results last week, although they failed to live up to the billing with Wall Street and investors. Having previously expected 27 Canadian cents per share in profit for the full year in 2019 (CA$0.27), Wall Street is now looking for CannTrust to deliver just CA$0.11 in full-year profit.

The same is even true of the nation's largest producerAurora Cannabis. Despite blowing away its competition in the production department, full-year profit forecasts for fiscal 2020 have steadily declined over the past three months from CA$0.11 per share to just CA$0.03 per share. At this point, there's the very real possibility that it may not even be profitable if Canada doesn't resolve its supply constraints soon.

Surprise! These three marijuana stocks have rising consensus profit projections

Amazingly, though, three of Canada's more than one dozen publicly traded marijuana growers have seen their profit projections for their forward year tick higher over the past three months. Let's take a closer look at what these pot stocks are doing right -- at least compared to a majority of their peers.

A dollar sign shadow being cast atop a pile of cannabis leaves.

Image source: Getty Images.

OrganiGram Holdings

New Brunswick-based OrganiGram Holdings (OGI -1.49%) was projected to earn CA$0.33 per share in profit in fiscal 2020 by Wall Street three months ago. However, today the consensus calls for the largest Atlantic-based grower to earn CA$0.38 in fiscal 2020.

What gives, you ask? For starters, think of the geographic advantages OrganiGram is privy to as a top-tier producer in the Atlantic region. Although New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island have a smaller number of inhabitants than other Canadian provinces, early self-reported survey data shows that adults in these provinces and territories are much more likely to have used weed over the past three months, relative to the Canadian national average. That's good news for OrganiGram, which should have a solid presence in the Atlantic region.

OrganiGram also deserves credit for its growing technique, which involves using three tiers inside of its grow rooms at its Moncton campus. Using tiers will help maximize the company's 490,000 square feet of grow space, ultimately pushing its yield per square foot to about 230 grams, which is well over double the industry average in Canada.

To boot, OrganiGram is one of a small handful of marijuana stocks with a focus on just one grow site. Focusing only on one location helps to minimize supply chain expenditures, which, in turn, should help the company's margins. All of these factors look to be playing a role in OrganiGram's improving outlook.

An up-close view of a premium flowering cannabis plant growing indoors.

Image source: Getty Images.

Flowr Corporation

Even though it's a relative tiny tot in the production department, Flowr Corporation (FLWPF) has a one-up on most of its competition when it comes to rising forward operating expectations. Roughly three months ago, Wall Street had been looking for a consensus loss of CA$0.10 per share for fiscal 2019. However, this consensus estimate has narrowed to a forecast loss of CA$0.04 per share as of today.

What makes Flowr so unique is the company's focus on ultra-premium cannabis. Most of the dried flower being sold today in Canada could be described as discount or average quality. This makes premium dried flower sort of a niche market, with above-average per-gram pricing and little in the way of supply to drive down this higher price. Thus, premium flower tends to produce higher margins than discounted cannabis, even though the patient pool is much smaller with premium flower.

It's also worth pointing out that premium flower will likely target a consumer who isn't part of the traditional cannabis culture. Rather, premium pot favors a more affluent clientele who is less likely to change their buying habits based on minor fluctuations in the Canadian economy. Translation: Flowr should see a steady stream of growth as a result of its ultra-premium focus.

At the moment, Flowr is only producing about 5,000 kilos on an annual run rate basis. But as the company's Kelowna campus is built out and licensed, Flowr expects to peak at 60,000 kilos of premium flower per year in 2021. Additionally, the company is calling for yields of 300 grams to 450 grams per square foot, which would be three to 4.5 times the industry average. In sum, Flowr's operating margins may eventually blow its peers out of the water.

A cannabis growing greenhouse with multiple rows of potted marijuana plants.

Image source: Getty Images.

Village Farms International

Lastly, Village Farms International (VFF -2.47%) was forecast to produce CA$0.46 per share in profit in fiscal 2020 three months ago, but is now on track for CA$0.78 per share in full-year profit, per Wall Street.

The big uptick for Village Farms looks to be the result of its joint venture with Emerald Health Therapeutics (EMHT.F), known as Pure Sunfarms, coming online. When Village Farms reported its operating results last month, 825,000 square feet of the roughly 1.03 million square feet being retrofitted in British Columbia for cannabis production had been licensed by Health Canada. What's more, Pure Sunfarms wound up generating a marginal profit for Emerald Health and Village Farms in the latest quarter. By 2020, the facility should be fully operational, with more than 75,000 kilos being produced each year.

Village Farms also benefits by having an alternative revenue stream. Prior to partnering with Emerald Health, the company was solely focused on its generally low-margin vegetable-growing greenhouses. This vegetable-growing business is enough to bring in around $150 million in sales per year, creating enough cash flow that Village Farms hasn't had to turn to dilutive share offerings to raise capital. Since share-based dilution is an issue throughout the pot industry, the simple fact that it isn't with this company has made it very popular with investors during the first quarter.

Although Pure Sunfarms will still need to secure additional provincial supply deals and diversify its product portfolio, it's off to a good start, and that's reflected in Village Farms' forecast.