Though it's certainly prone to volatility, few industries offer the long-term growth potential of legal marijuana. Each and every Wall Street sales forecast implies a compound annual growth rate that's in the double digits over the next decade, which could ultimately mean that patient investors in the green rush are handsomely rewarded.

But the big question remains: Which pot stocks to buy?

Most cannabis stock investors prefer to buy a handful of the best-known names in the business. Think Canopy Growth, Aurora Cannabis, Cronos Group (NASDAQ:CRON), and HEXO. But the thing is, there's a sea of potential bargains in the cannabis arena that have mostly flown under Wall Street's and investors' radars. If I were you, I'd pay close attention to the following three off-the-radar cannabis stocks.

A vial of cannabidiol-rich liquid being held in front of a flowering cannabis plant.

Image source: Getty Images.

MediPharm Labs

As you're likely aware, all eyes are on the promise of cannabidiol (CBD) throughout North America. CBD is the cannabinoid best known for its perceived medical benefits that doesn't get users high. In the U.S. alone, the Brightfield Group foresees CBD sales soaring more than 100% per year between 2018 and 2023 to $23.7 billion.

However, betting on CBD product providers may not be the smartest way to play this rapid growth. Rather, extraction-service companies like MediPharm Labs (OTC:MEDIF) look to be a much safer way to bet on the rise of CBD. MediPharm offers its third-party extraction services to growers by taking hemp and cannabis biomass and providing distillates, resins, and other extracts in return that can be used to make derivative pot products. As a reminder, derivatives, such as edibles and nonalcoholic infused beverages, will begin hitting dispensary shelves in Canada by mid-December, and these are much higher margin products than traditional dried cannabis flower.

To date, MediPharm Labs has landed extraction services deals with a number of major Canadian growers, including Supreme Cannabis Company, Canopy Growth, TerrAscend, and, most recently, Cronos Group. The May-announced deal with Cronos is for approximately $30 million in cannabis concentrates over an 18-month period, but it may increase to $60 million over 24 months.

With MediPharm Labs reporting an excellent second quarter earlier this week, featuring 43% sequential sales growth and $4.1 million in net income, and plans in place to up its Canadian processing capacity to 500,000 kilos per year, it's certainly a name to know.

The facade of the Planet 13 SuperStore in Las Vegas, Nevada.

The facade of the Planet 13 SuperStore in Las Vegas. Image source: Planet 13.

Planet 13 Holdings

The United States is considered to be the crown jewel of the cannabis industry. Even though marijuana remains entirely illegal at the federal level, U.S. sales are expected to account for close to half of all global weed sales in 2019. That's because 33 states have given the green light to medical cannabis, with 11 others also allowing adult consumption. With sales soaring -- and only expected to get stronger -- it's no surprise that vertically integrated dispensary operators are looking to expand into as many (legal) states as possible.

However, unbridled expansion isn't in the cards for Planet 13 Holdings (OTC:PLNH.F), which is approaching things far differently than its dispensary peers. Instead of focusing on quantity, Planet 13 has chosen to address the quality of the cannabis shopping experience.

The Planet 13 SuperStore just west of the Las Vegas Strip in Nevada is the largest dispensary, period. When all of its bells and whistles are complete, including a pizzeria, coffee shop, events center, and consumer-facing processing center, the SuperStore will span 112,000 square feet, which is a bit larger than the average Walmart. This SuperStore, which opened in November, has seen its average daily customer count nearly double, all while the average ticket per paying customer has risen by $12, through July. Right now, Planet 13's single store is responsible for about 10% of the entire state of Nevada's legal weed sales

As someone who's visited the SuperStore firsthand, I can attest to its unique experience. Planet 13 has done a great job of incorporating technology to improve the customer experience, and has the perfect margin-driving store layout, with high-margin derivatives nearest the front of the store and the checkout stands.

Considering that Planet 13 is set to open a 40,000-square-foot store in Santa Ana, California, just minutes from Disneyland, we'll soon find out if the company has a duplicable business model on its hands.

An up-close view of a premium cannabis plant flowering in an indoor grow farm.

Image source: Getty Images.

Flowr Corp.

A third off-the-radar cannabis stock that you'd be wise to closely monitor is Canadian pot grower Flowr Corp. (OTC:FLWPF). Despite being approved to list its stock on the Nasdaq, then subsequently turning down that honor and choosing to stay on the over-the-counter exchange, Flowr brings two very unique things to the table.

For starters, Flowr is focused on a unique subset of the cannabis-growing market: premium and ultra-premium flower. Whereas most growers are delivering discount or average-quality dried marijuana, Flowr is set to face minimal competition from the exceptionally high-quality pot it's producing at its Kelowna campus in British Columbia. I believe it's also worth mentioning that the company's projections of 300 grams of yield per square foot at Kelowna might be tops in the industry for any large-scale grow farm.

Secondly, Flowr recently agreed to acquire the 80.2% stake in Holigen that it didn't already own. This will add the 7 million-square-foot Aljustrel outdoor grow farm to its portfolio. When fully operational, this Portugal-based asset could yield in the neighborhood of 500,000 kilos per year, making Flowr one of the world's largest growers, at least by peak output. With outdoor-grown cannabis unlikely to be anywhere near the quality that's being produced in Kelowna, Flowr is expected to use this output to produce high-margin derivative products for the European market.

Considering its per-gram pricing strength at Kelowna, and the addition of perhaps 500,000 kilos of overseas production on the cheap, Flowr is worth a closer look.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.