A not-so-long time ago, cannabis stocks were sizzling hot. Many of them were also overhyped. This led to the inevitable industrywide decline as cannabis stocks fell out of favor. Investors realized that the sky-high sales and profits they expected could take longer to be achieved than they hoped.

But the current malaise that is afflicting cannabis stocks could be lifted in the not-too-distant future. Although too much of the allure of these stocks in the past stemmed from hype, the reality is that the global cannabis industry will almost certainly grow tremendously. And this growth will create some big winners. Three beaten-down cannabis stocks that I think are likely to bounce back in a big way are Charlotte's Web Holdings (OTC:CWBHF), Innovative Industrial Properties (NYSE:IIPR), and Trulieve Cannabis (OTC:TCNNF)

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1. Charlotte's Web

Charlotte's Web stock is down more than 40% from the highs set earlier this year. The hemp-derived cannabidiol (CBD) pioneer announced disappointing second-quarter results in August. There's also some uncertainty about what the U.S. Food and Drug Administration (FDA) might do concerning regulating CBD products. But there are reasons to believe that the future should be very bright for Charlotte's Web.

The company has more than doubled the number of retail locations that carry its CBD products so far this year. More than 2,000 stores were added between May and August. This huge expansion of its retail distribution network should result in significantly higher sales for Charlotte's Web in the coming quarters.

Charlotte's Web's earnings should improve dramatically as well. The company has boosted spending in recent quarters in anticipation of future growth. But its spending shouldn't rise nearly as much as revenue will in the second half of 2019, leading to faster earnings growth.

It remains to be seen what the FDA will decide on CBD regulations. The final CBD regulations could provide a big boost for Charlotte's Web. Whatever the agency ultimately does, though, having clear parameters for the U.S. CBD market should be better for Charlotte's Web than the current uncertainty. 

2. Innovative Industrial Properties

Innovative Industrial Properties' market cap has nearly been cut in half since early July. The stock sank after the cannabis-focused real estate investment trust (REIT) announced a stock offering to raise cash. In addition, the overall weakness among cannabis stocks weighed on IIP.

A sell-off after a dilution-causing stock offering makes sense. However, IIP is arguably now in a better position than it's ever been in to profit from growth in the U.S. cannabis market. The company has more cash to invest in properties. It also has more properties generating reliable cash flow than ever before -- 32 and counting.

The legal cannabis markets in several of the states where IIP currently operates are only in their infancy. IIP also only owns properties in 12 states, but 33 states have legalized medical cannabis so far. The cannabis-focused REIT has plenty of opportunities for growth.

In the meantime, IIP continues to rake in profits -- something most cannabis companies can only dream of doing. It also pays a dividend that currently yields north of 4%. Solid growth prospects, a strong financial position, and a fantastic dividend make Innovative Industrial Properties one of the most attractive cannabis stocks on the market, in my view. 

3. Trulieve Cannabis

Trulieve is already rebounding somewhat after falling as much as 50% in late August. The stock is still close to 35% below its high level set in April, though. I think it has plenty of more room to run.

The primary key to Trulieve's success is the continued expansion of Florida's medical cannabis market. Trulieve currently operates 37 stores in the Sunshine State but plans to bump that number up to 44 by the end of this year. The company ranks as the top medical cannabis operator in Florida, estimating that it dispenses more than half of the total medical cannabis in the state.

Trulieve reported record revenue of $57.9 million in the second quarter. The company expects full-year 2019 revenue will be between $220 million and $240 million, with revenue soaring to as much as $400 million next year. Trulieve is also already profitable, delivering net income of $57.5 million in Q2 with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $31.6 million.

While Trulieve benefits mainly from growth in Florida's medical cannabis market, it claims smaller operations in California, Connecticut, and Massachusetts. The company would likely be a big winner should Florida legalize recreational marijuana. Efforts are underway to put a constitutional amendment on Florida's state ballot in November 2020.

Common denominators

You might have noticed that Charlotte's Web, Innovative Industrial Properties, and Trulieve share several things in common. They're all U.S.-based. They're all profitable. And they all have great growth opportunities ahead of them. 

The U.S. cannabis market is the largest in the world, but U.S. cannabis stocks tend to be priced more attractively than Canadian cannabis stocks because marijuana remains illegal at the federal level in the U.S. I think investors interested in the cannabis industry should especially look closely at U.S.-based stocks because of these reasons.

While any of these three companies could need to issue new shares to raise capital, their profitability reduces the need to do so often. And if they do issue stock, it's likely going to be to fuel more growth in the booming U.S. market. 

Charlotte's Web, IIP, and Trulieve are beaten-down now. But with these three common denominators working to their advantage, I don't think they'll stay that way for too much longer.

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.