Let's face it: Marijuana stocks are struggling. Last week, several of the top pot companies -- including the two largest, Aurora Cannabis and Canopy Growth, reported their quarterly results, and they performed so badly that the ensuing response by the market was a bloodbath.

Still, it would be a mistake to swear off the cannabis industry entirely, since it is still one of the fastest-growing sectors in the world. There are many ways to invest in various segments of the industry, several of which don't include putting your hard-earned cash in pure-play pot stocks that offer little more than flimsy promises. Here's one company with a hand in the cannabis space you should keep on your watch list: GW Pharmaceuticals (NASDAQ:GWPH).

Scientist in a lab coat putting oil in test tubes.

Image Source: Getty Images.

Not a cannabis stock?

In September, GW Pharmaceuticals' CEO Justin Gover, expressed frustration at the company being listed among marijuana stocks as opposed to biotech stocks. Fair enough, but the fact remains that GW focuses on cannabis-derived drugs: According to the company's own investor presentation, GW Pharma is the "Global Leader in Cannabinoid Medicines." Still, the point Gover was making is that GW's business environment is very different from that of pure-play cannabis companies.

Discussions about its area of classification as a business aside, focusing on GW's financial results shows that it is performing better than most cannabis companies. During the third quarter, GW recorded total revenues of about $91 million, a 26% sequential increase and an almost 4,000% year-over-year increase.

In particular, the company's top-selling drug -- Epidiolex -- is performing very well. Epidiolex is used to treat seizures in patients who suffer from Lennox-Gastaut syndrome or Dravet syndrome. During the third quarter, sales of Epidiolex increased by 26% sequentially to $86.1 million.

And there's more good news on the way for GW's top-selling product. The European commission approved Epidiolex in September, and its rollout in various European markets is already on the way and will extend through 2020. Given how successful Epidiolex has been in the U.S., the drug could rack up impressive sales in Europe as well, which should help GW Pharma's top line continue growing at a nice clip. Note that according to the European Medicines Agency, the number of people affected by Lennox-Gastaut Syndrome and Dravet Syndrome amounts to about 103,000 and less than 26,000, respectively. 

Beyond Epidiolex

Most investors interested in GW Pharma will likely focus on the prospects of Epidiolex, and with good reason. However, the company plans on diversifying its revenue stream. During the company's third-quarter earnings conference call, Gover said: "Understandably in the Epidiolex launch year, there has been focus on commercial performance but it is important to remind investors that GW is a platform company with an exciting pipeline which is going to be the subject of investment in 2020."

Perhaps the most promising drug in GW's pipeline is Sativex, a product containing both tetrahydrocannabinol (or THC, the ingredient in weed that gives users a high) and cannabidiol (CBD). Sativex -- which has already obtained regulatory approval in more than two dozen countries outside the U.S. -- treats muscle pain and spasms caused by multiple sclerosis (MS). The company also plans to expand its reach with Sativex by adding schizophrenia and other neurological disorders to the list of conditions it treats. GW Pharma plans to launch Phase 3 clinical trials for Sativex in the first quarter of next year to eventually obtain FDA approval for the drug.

Should you buy?

Epidiolex will almost certainly see even better days ahead. We are still in the early stages of this drug landing on the market, but it has already racked up well more than $100 million in sales. Further, it was recently approved to be sold in 28 more countries, which should sit well with investors. Lastly, once Sativex hits the U.S. market, GW Pharma will become even more attractive.

Given all these factors, GW Pharmaceuticals looks like a relatively safe option for those looking to profit from the growth potential of the cannabis industry.

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.