At this time last year, cannabis stocks could do no wrong. That's because Canada had just become the first industrialized country in the world to legalize recreational marijuana on Oct. 17, 2018. Between this milestone, legalization, and a steady progression of U.S. states giving cannabis the green light, the future for marijuana was, aptly, budding.

However, the industry now looks like a shell of its former self. Most brand-name pot stocks have shed half of their value, if not more. In Canada, supply issues have been persistent since day one of legalization, and they'll likely continue as derivative pot products begin hitting the market. Meanwhile, legalized states have been plagued by high tax rates and an unrelenting black market.

But according to some very lofty price targets from Wall Street, two marijuana stocks appear to have all-or-nothing potential.

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

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KushCo Holdings: Implied upside of 423%

Pretty much no marijuana stock offers more upside, at least according to Wall Street's consensus price target, than ancillary player KushCo Holdings (OTC:KSHB). Wall Street forecasts KushCo to more than quintuple in value, albeit that's probably a reflection of the stock's 80% loss in value over the past three months.

There's no doubt KushCo offers a lot of intrigue as it works behind the scenes for the global weed industry. Right now, the company is generating most of its revenue from the sale of vaporizers. As alternative forms of consumption become popular in the pot industry, the expectation is that vapes will lead the charge among these derivative products. According to a report from Cowen Group, vapes are expected to account for 23% of all U.S. marijuana sales, which would only trail dried cannabis flower in aggregate revenue.

However, KushCo's two other revenue streams shouldn't be slouches, either. This is a company with a packaging and branding business that should gain steam as cannabis use becomes more mainstream. With packaging regulations remaining strict, KushCo provides that extra set of eyes to businesses to ensure compliance and to help cannabis growers stand out.

Likewise, the company's hydrocarbon gases and solvents segment should thrive as the push to derivatives ramps up. Hydrocarbon gases are an essential input to the production of high-margin cannabis oils, while solvents are used in the production on concentrates. It's no secret that derivatives offer much better margins than dried flower, which means the inputs KushCo supplies should only grow in demand.

A bearded man wearing sunglasses exhaling vape smoke while outside.

Image source: Getty Images.

On the other side of the coin, KushCo has two problems. Firstly, vape-related health concerns are a direct threat to the company's vaporizer sales, which currently account for a large chunk of quarterly revenue. According to the Centers for Disease Control and Prevention (CDC), 33 people have died from mysterious lung illnesses associated with vaping, as of Oct. 15, and the agency isn't certain what's responsible for these illnesses. The CDC's only recommendation for the time being is that users avoid consuming tetrahydrocannabinol (THC) via vape liquids. THC being the cannabinoid primarily found in cannabis plants that gets users high.

The other concern has to do with cash. KushCo recently raised $30.2 million at an offering price that was well below where the stock had recently been trading. While it's not uncommon for cannabis stocks to raise capital, the fact that this offering was so far below the previous day's closing price is alarming.

What we have here is a company that recently confirmed its full-year sales guidance and appears to be a go-to cannabis middleman, but continues to lose money and is facing a huge headwind for its largest sales generator. That's the perfect definition of an all-or-nothing pot stock.

An up-close view of a flowering cannabis plant in a large indoor grow room.

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CannTrust Holdings: Implied upside of 188%

The other marijuana stock with an abundance of potential, but also a mountain or risk, is Ontario-based CannTrust Holdings (NYSE:CTST). Based on Wall Street's consensus price target, CannTrust has the potential to nearly triple in value.

If the name sounds familiar, it's because CannTrust has been implicated in the biggest marijuana scandal to date. In early July, the company came clean that it had been growing marijuana in five unlicensed rooms for a period of six months between October 2018 and March 2019. This admission led Health Canada to temporarily suspend CannTrust's sales license while it continued its investigation. The agency also confiscated roughly 5,000 kilos of inventory from these rooms.

In addition to illegally growing cannabis, details came to light that then-CEO Peter Aceto knew that this illicit cultivation was ongoing but did nothing to stop it. Aceto was shown the door just week after the scandal was announced.

Making matters worse, Health Canada issued its ruling last month. CannTrust's cultivation and sales licenses were both officially suspended, and the company more recently made the decision to destroy about $58 million worth of its illicitly grown marijuana. The real concern here is that it's unclear when CannTrust will get its licenses back.

A dried cannabis buds and small vial of cannabinoid-rich oil next to a small Canadian flag.

Image source: Getty Images.

On the flipside, there's discernible value as one of Canada's largest growers if the ship can be righted. CannTrust's flagship grow facility, Niagara, along with Vaughan, should be capable of 100,000 kilos of hydroponic-grown marijuana per year. Growing in this non-traditional manner should be relatively inexpensive given Niagara's easy access to cheap water and electricity.

Beyond Niagara, the company was in the midst of developing large outdoor cultivation sites when the you-know-what hit the fan. CannTrust aims to grow between 100,000 kilos to 200,000 kilos a year outdoors, which more than likely will be processed and used to create higher margin derivatives.

Another consideration here is that CannTrust is one of only four Canadian growers that's been granted supply deals in every Canadian province. When Canada manages to work through its supply issues, these agreements should prove highly lucrative.

There's an obvious trust factor that'll be difficult to overcome here for CannTrust. But if the company can satisfy Health Canada's laundry list of deficiencies and regain its licenses, there'll be plenty of potential for share price appreciation.