Thanks to a dismal December, the vast majority of marijuana stocks are in positive territory since the beginning of 2019, but none have soared as high as these three. After rocketing up more than 100% this year, investors want to know if they have any more fuel in the tank.

Company (Symbol) Year-to-Date Performance Market Cap
Curaleaf Holdings (CURLF -0.57%) 133% $5.1 billion
HEXO (HEXO) 125% $1.6 billion
OrganiGram Holdings (OGI -3.52%) 101% $1.1 billion

Data source: Yahoo! Finance.

Past performance doesn't guarantee future results. In fact, it can make further gains more difficult to come by. Here's what you need to know about the paths ahead for these cannabis businesses.

1. Curaleaf Holdings: A cosmopolitan pot stock

Curaleaf is a U.S. cannabis company under the control of a Russian oligarch that made its stock market debut on a Canadian exchange last October. The company's focused on highly populated states with strict and limited licensing rules on the East Coast.

The vast majority of this company's 44 dispensaries are in states that require cannabis to be cultivated, processed, packaged, and sold by the same business. Fewer options for consumers mean higher profit margins for Curaleaf, but the company still lost $56.5 million last year.

That's why it was surprising to see Curaleaf agree to acquire the Select brand from Cura Partners for around $950 million. On the West Coast, Cura Partners is a wholesale distributor of the popular Select brand of oil-based cannabis products.

Select brand vaporizer cartridges are well regarded for quality and command a high price point, but hardly any of Curaleaf's stores will be able to sell them until they expand production to each state. The acquisition didn't make any sense, until we noticed that Boris Jordan, a Russian oligarch who owns 100% of Curaleaf's multiple voting shares, also owns 11.5% of Cura Partners.

Curaleaf may have had investors best interests in mind when it splashed out on an acquisition that doesn't fit. If the company can't prove this is the case within the next few earnings reports, though, the stock doesn't deserve to rise any further.

Hexo employees in the company's grow facility.

HEXO employees during the first harvest in its giant new greenhouse. Image source: HEXO.

2. HEXO: The first harvest festival

Shares of this Canadian cannabis producer have been jumping thanks to enthusiastic investment bank analysts with some good reasons to be excited. 

In April, HEXO completed the first harvest in its 1 million-square-foot greenhouse, a big step toward reaching an estimated annual production capacity of 108,000 kg of dried flower annually. HEXO owes its popularity to the medicinal products it makes from that flower and sells to medical patients under the Hydropothecary brand. 

Once Health Canada finalizes its rules for edible cannabis products and beverages, HEXO's joint partnership with Molson Coors (TAP -0.09%) is ready to produce products that meet the criteria. 

Unfortunately, Health Canada intends to limit the amount of THC in edibles and beverages to just 10 mg per serving. That might work for an inexperienced cannabis user, but frequent consumers would need to shovel a dozen down their gullets every day just to avoid withdrawal symptoms.

In March, HEXO told us that sales could double from the company's fiscal second quarter to around 27 million Canadian dollars during its fiscal fourth quarter, which ends on July 31. That means the stock is priced at roughly 16 times forward sales expectations, and it probably isn't going to climb much further until it meets those expectations.

Big mason jars full of marijuana.

Image source: Getty Images.

3. OrganiGram Holdings: Heading south

Unlike HEXO and Curaleaf, OrganiGram Holdings has been reporting a profit. During its fiscal second quarter, OrganiGram booked CA$26.9 million in net sales and showed us how to run an efficient cannabis operation while increasing capacity. Sales, general, and administrative expenses rose to just CA$5.7 million during the second quarter and running a tight ship allowed operations to squeak out a profit, at least on an adjusted basis.

After adding back share-based compensation to the adjusted profit, operations lost just CA$1.8 million during OrganiGram's fiscal second quarter. It looks like the company is close to sustainable, positive cash flows, and that's not the only reason the stock could keep rising in 2019.

OrganiGram recently applied to list its shares on the Nasdaq exchange. That will allow a lot more sources of investment find their way onto the company's balance sheet and probably send the stock jumping again. 

What to look out for

OrganiGram's disciplined execution gives the stock a good chance among these three to continue rising into the long run. Hopefully, management won't allow investment bankers in Manhattan to push the company into another big offering.

OrganiGram's outstanding share count has risen 48% over the past couple of years. Before adding it to your portfolio, it might be best to see if the company can get through a major U.S. stock exchange listing without losing discipline.