For years, the words "value" and "cannabis" pretty much didn't belong in the same sentence. That's because marijuana stock valuations were going through the roof on nothing more than promises of industrywide growth once Canada, and eventually the U.S., legalized the drug.

Today, however, it's a much different story. With Canada having legalized recreational pot, and two-thirds of all U.S. states giving the green light to medical marijuana (11 of which also allow adult-use cannabis), operating results actually matter. Since being placed under the same microscope as time-tested businesses and industries, marijuana stocks have not fared well. Most are still losing money on an operating basis, and North America is contending with a slew of supply and tax concerns that are adversely impacting the industry.

But there are a number of ways to measure value beyond just the forward price-to-earnings ratio.

A handful of dried cannabis buds lying atop a messy pile of cash.

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The market's cheapest pot stocks, based on forward-year sales

Right now, there are four cannabis stocks valued at less than 2 times next year's projected sales, according to Wall Street's consensus. Are these stocks genuinely cheap, relative to their expected sales, or might this be a value trap in waiting? Let's take a closer look.

Acreage Holdings: 1.59 times 2020 consensus sales

One trend you're bound to note on this list is that the cheapest cannabis stocks are all focused on the U.S. market. Multistate dispensary operator Acreage Holdings (OTC:ACRGF) hasn't witnessed a large degradation in Wall Street's revenue consensus for 2020 so much as the company's valuations has been clobbered due to its ties to Canopy Growth (NYSE:CGC).

As some of you may already know, Canopy Growth has agreed to acquire Acreage Holdings on a contingent-rights basis. The deal involves a $300 million cash payment to Acreage shareholders, with the remainder being paid for in Canopy's common stock. And, most important, the deal only goes through if the U.S. federal government legalizes cannabis. Herein lie the two issues.

First, Canopy Growth's stock has been beaten to a pulp in recent months. The company fired its visionary co-CEO Bruce Linton in early July, reported an anemic gross margin of 15% in the fiscal first quarter, and has seen marijuana sales growth come to a virtual standstill in Canada as the country continues to work through supply issues. Since a significant portion of the Acreage deal is tied to the value of Canopy's common stock, it's been taken along for the ride lower.

The second concern is that it doesn't look as if the U.S. federal government will legalize marijuana anytime soon. That casts doubt on whether or not the deal will ever come to fruition.

On the bright side, Acreage looks to be a top-five multistate operator in terms of retail licenses held, and it has a pro forma presence in more states than any other dispensary chain. That makes it a potentially intriguing pot stock worth closely eyeing.

A vape pen next to a vial of liquid and neatly arranged dried cannabis flower.

Image source: Getty Images.

KushCo Holdings: 1.3 times 2020 consensus sales

Sidestepping into the ancillary industry, KushCo Holdings (OTC:KSHB) is even cheaper than Acreage, at 1.3 times next year's consensus sales, per Wall Street. Similar to Acreage, sales forecasts for KushCo aren't necessarily coming down, so much as the company's stock has taken a licking.

For starters, KushCo has been adversely impacted by the trade war. The company's largest revenue segment is vaporizers, and many of these parts are imported from China. For a while, KushCo was eating import (i.e., tariff) costs rather than passing them onto consumers, but has since changed its strategy and raised its pricing to bolster its margins.

There's also concern that high tax rates in key markets (ahem, California), and supply concerns in Canada, could hurt the supply for derivative products and packaging solutions. With KushCo selling vaporizers, providing packaging and branding solutions, and supplying hydrocarbon gases and solvents used in the production of high-margin derivatives, there are worries that sales growth could slow.

The biggest question, though, is when KushCo might turn the corner to profitability. It's incredibly inexpensive relative to sales, but it may not be profitable on a recurring basis until 2021. As a shareholder, I do see value in KushCo as a go-to cannabis middleman. But I also expect there to be plenty of bumps in the road along the way.

A green highway sign that reads, Welcome to California, with a white cannabis leaf in the top right-hand corner.

Image source: Getty Images.

Cresco Labs: 1.28 times 2020 consensus sales

Even cheaper than KushCo, based on forward-year sales, is multistate dispensary operator Cresco Labs (OTC:CRLBF). What makes this valuation so intriguing is that Cresco is expected to outpace all other pot stocks in 2020 revenue, save for rival Curaleaf Holdings. Current estimates call for nearly $699 million in 2020 full-year sales.

So, why no love for Cresco Labs? Part of the answer may have to do with its pending acquisition of Origin House (OTC:ORHOF). Assuming it gains approval from the U.S. Justice Department's antitrust division, this will be an all-stock deal, with means a ballooning in Cresco's outstanding share count, and presumably a higher market cap once Origin House is added to the mix.

Along those same lines, another possibility involves California's cannabis struggles. High tax rates in California, coupled with 81% of municipalities disallowing the legal sale of adult-use marijuana, has given rise to a resilient black market that can consistently undercut legal-channel pot pricing. Since Origin House is one of the few companies to hold a cannabis distribution license in California, this black market presence could subdue the excitement surrounding Cresco's acquisition of the company.

Though I freely admit to not being a fan of the all-stock structure of the deal, I do see plenty of value for Cresco Labs in being able to get its branded products into more than 500 California dispensaries. If the deal is approved, Cresco Labs may very well be a long-term bargain.

A large marijuana sign in front of a dispensary.

Image source: Getty Images.

MedMen Enterprises: 0.83 times 2020 consensus sales

But the cheapest cannabis stock of them all, at least on the basis of forward sales, is upscale multistate dispensary operator MedMen Enterprises (OTC:MMNFF). According to Wall Street's consensus, MedMen is valued at a mere 0.83 times its 2020 sales.

However, while the other three marijuana stocks here do offer a potentially intriguing value proposition, despite their near-term challenges, MedMen, in spite of its relative "cheapness," is the one I'd strongly suggest investors avoid.

MedMen is attempting to set up a sizable market presence in California and Florida. It's also in the process of acquiring privately held dispensary operator PharmaCann in an all-stock (i.e., dilutive) deal that'll double the number of states it's operating in to 12, as well as lift its operational stores and retail license count. But the problem is that its reliance on California has been a serious early stage crutch for the company. Sequential sales growth for its existing California locations came in at 5% in the third quarter and 10% in the fourth quarter, which is far from impressive given the Golden State's cannabis potential.

Furthermore, MedMen has offered little hope that it'll be profitable on a recurring basis anytime soon. Even with significant reductions to the company's selling, general, and administrative costs, MedMen has been losing money and burning through its capital at an extraordinary rate.

For the time being, it looks to be the worst of breed among multistate operators. That makes its relatively inexpensive valuation well deserved.