There's little doubt that the U.S. is going to be the most lucrative legal cannabis market, once it's fully up and running, and assuming pot is legalized federally. And while the No. 2 spot has typically belonged to Canada, it may not end up that way. While Canada certainly has a head start, having been just the second country to fully legalize marijuana (Uruguay was first), it hasn't exactly been a smooth ride for the cannabis industry there in the period since.

Supply issues have been a big problem, and restrictions on advertising have made it difficult for companies to build their brands. However, even if those issues are addressed, the potential for the Canadian market may still not be all that big, if for no other reason than its relatively small population of 37 million people. 

Results so far have been so disappointing that researchers from BDS Analytics recently cut their revenue forecasts for the Canadian market: Where they previously expected it to hit $5.9 billion in 2022, they now are predicting it will hit $5.2 billion by 2024. The managing director of BDS Analytics, Tom Adams, blames the "very cautious approach" that the country's government is taking to cannabis for the slower growth of the market.

Map of Canada with a marijuana leaf

Image source: Getty Images.

Another market that could prove to be a better option for investors: Asia

One research company, Prohibition Partners, believes that the market for legal cannabis in Asia could be worth more than $5.8 billion by 2024, eclipsing the $5.2 billion that Canada would have by the same time, if both figures prove to be correct. Researchers estimate that nearly 86 million people on the continent use cannabis every year. 

The big advantage for Asia is certainly its size -- there are vastly more potential cannabis consumers in that part of the world. The disadvantage, however, is that the effort to get it legalized for adult use in the nations is likely to be more of an uphill battle. There's still a lot of opposition to marijuana in the region, and penalties for using it or selling it are still extremely stiff in some counties.

While it's unfair to compare the Canadian market to an entire continent, the reality is that the bulk of the sales in Asia are expected to come from just two countries, China and Japan, which Prohibition Partners anticipates could make up 90% of the market. 

Great opportunity for companies to expand into Asia today 

One company that could benefit greatly from a strong Asian market is GW Pharmaceuticals (NASDAQ:GWPH), maker of Epidiolex, the first cannabidiol (CBD)-based treatment to be approved for use by the U.S. Food and Drug Administration. The U.K.-based company has already set its sights on other international markets. Epidiolex has been approved for clinical trials in Japan; if it is successful and approved by regulators there, that could lead to greater acceptance of CBD treatments across the continent. 

GW is still growing, and after recording $72 million in sales in its most recent quarter, the company is poised for a big improvement this year. In all of 2018, GW generated just $29 million in revenue.

However, the opportunity isn't limited to just pharmaceutical products, as any cannabis company producing CBD products could have an incredible opportunity to grow in Asia. And with many of the world's largest cannabis producers focusing on North America and Europe, now could be a great time for a company to establish a strong position there.