Canopy Growth (NYSE:CGC) trades at a $7 billion market cap and, despite shedding half of its value over the past six months, the stock is still an expensive buy. The stock will likely recover if marijuana becomes legal in the U.S. and the company can finally enter the market through its pending acquisition of Acreage Holdings. But for now, cannabis investors are better off looking elsewhere. And the U.S. market already has many appealing pot stocks where investors can take advantage of the industry's rapid growth.

One cannabis stock that stands out is Planet 13 Holdings (OTC:PLNHF). The Nevada-based company could be one of the hottest pot stocks to buy in 2020. Here's why:

Location, location, location

With a great location in Las Vegas -- a city that brings in millions of tourists every year -- Planet 13 has the advantage of tapping into local and foreign customers. Granted, Planet 13 isn't the only cannabis company in Vegas. But it's not just the city that makes the stock a hot buy -- it's the company's SuperStore, located near the Strip, which promises to be a hub for not just cannabis, but entertainment and dining as well.

Cannabis greenhouse.

Image source: Getty Images.

Earlier this month, the company announced it served nearly 700,000 customers in 2019 and that it captured nearly 10% of the market in Nevada. In a press release, co-CEO Bob Groesbeck said, "The SuperStore is Nevada's highest-grossing and most influential dispensary with over 9% of Nevada's total sales in 2019." 

The company also announced in June that it would open a location in Santa Ana, California, a "short ten-minute drive from Disneyland." Planet 13 expects the location to be open in the second half of 2020. 

The SuperStore could see a lot of traffic in 2020

With the launch of a cannabis museum at its SuperStore location, dubbed the "Cannabition," in the second quarter of this year, Planet 13 may see even more SuperStore traffic. Plus, the SuperStore, which the company also refers to as the Cannabis Entertainment Complex, received permits to open restaurants and cafes in October. Add to that the company's plans to host events at the SuperStore and the venue becomes an attraction for more than just cannabis enthusiasts.

The location has earned rave reviews thus far, averaging a solid 4.5-star rating on TripAdvisor. And it's not just curious tourists visiting the store -- the SuperStore averaged more than 1,750 paying customers per day in December. 

Over the trailing 12 months, Planet 13 generated more than $55 million in sales. And while it has generated losses, they've been relatively modest, totaling $7 million during that time.

New production facility increases capacity by 1,300%

In November, Planet 13 announced that its new production facility located at the SuperStore had begun operations after receiving its final permits. It will add an extra 15,000 square feet of space for production and it will be a tourist attraction too. The company says the facility will help produce its edible brands, Dreamland Chocolates and HaHa Gummies, and that "customers will be able to watch these brands being manufactured behind glass."

With more products in the works and greater capacity, the company is in terrific shape for what could be a strong performance in 2020.

Key takeaways for investors

In 2019, Planet 13's stock soared 80%, outperforming not just Canopy Growth, which declined 25%, but marijuana stocks as a whole, demonstrated by the Horizons Marijuana Life Sciences ETF falling by 37% over the same period.

If Planet 13 can continue adding to its sales while getting closer to breakeven in the process, it could become one of the hottest pot stocks to buy in 2020. With a price-to-sales ratio of less than five, the stock is also relatively cheap, especially next to Canopy Growth, which trades at more than 27 times its revenue. With some strong developments leading the way, Planet 13 could be on track for another strong performance this year.