With so many companies struggling in the cannabis market, it's easy to predict doom and gloom for the whole industry, but that's far from the case. It's just an emerging market with a ridiculous upside, and some companies are bound to struggle.

It may be inevitable that many in the sector won't survive, but here are three cannabis-related stocks that are thriving this year, including one medical dispensary company and two clinical-stage biopharmaceutical companies that have pursued cannabis-related therapies.

Marijuana leaf on top of hundred dollar bills.

Image source: Getty Images.

Trulieve, dominant in Florida, is ready to branch out

Trulieve (OTC:TCNN.F) is the biggest medical marijuana company in Florida by a wide margin. In the most recent reporting period for Florida's Office of Medical Marijuana Use, Trulieve sold nearly six times as many milligrams of medical marijuana THC and nearly five times as much marijuana in a form for smoking as its closest competitor, Surterra Wellness.

In the last quarter, Trulieve reported a record $96.1 million in revenue, 21% above what it did in the fourth quarter of 2019.

Trulieve just opened its 50th store last month and got provisional approval this month for an adult-use and recreational provisional license in Massachusetts, where it plans to open two retail dispensaries. It's also branching out with plans for a 750,000-square-foot indoor growing facility in Jefferson County, Fla., roughly 25 miles east of the company's headquarters in Tallahassee.

Investors seem to be warming to Trulieve. Its share price is up more than 53% in the past three months. That may be because it's one of the few marijuana companies to consistently show a profit. 

Arena is much more than a cannabis company

Arena Pharmaceuticals (NASDAQ:ARNA) is more than a "cannabis" company, as most of its drugs are noncannabinoid medicines. However, the clinical-stage pharmaceutical company does have one CBD-derived drug, Olorinab (APD371), which is in a phase 2b trial for pain relief for irritable bowel syndrome (IBS) and inflammatory bowel disease (IBD). 

The San Diego, Calif., company made $375 million last year in net income, turning a profit for the first time in years because of an $800 million licensing deal from United Therapeutics for the rights to ralinepag, a lung disease drug that Arena designed. Ralinepag is being tested for its use on pulmonary arterial hypertension (PAH), a type of high blood pressure that affects the heart. The company will continue to get royalty payments on the drug, provided it does well in continuing trials. 

With one profitable drug already behind it, the clinical-stage biotech's shares are up more than 45% this year. Investors are excited because the company has two promising drugs besides Olorinap in its pipeline. The furthest along is utility drug Etrasimod. It's in a phase 3 trial for ulcerative colitis, phase 2b/3 trials for Crohn's disease, and a phase 2b trial for atopic dermatitis. The FDA has designated fast-track status for the other drug, APD418, which is in a phase 1 trial for its use on patients with acute heart failure.

Cara Therapeutics is itching to find a pain solution

Cara Therapeutics (NASDAQ:CARA) is investigating the use of kappa opioid receptor agonist (KORA) therapies for the treatment of pruritis (chronic itchiness). The stock is up more than 36% in the past three months, mainly because of Korsuva, the company's most promising drug.

Korsuva has shown promise in a number of trials as a pain reliever and itch reliever for a number of conditions, including chronic liver disease, chronic kidney disease, and atopic dermatitis. The advantage to the KORA class of drugs such as Korsuva is that unlike other commonly prescribed opioids, such as morphine, that target the mu receptor, KORAs do not cross the blood-brain barrier well. That means they avoid the typical opioid side effects of addiction, depression, nausea, and sedation.

That said, Cara's connection to cannabidiol therapies is limited, as the company has done preclinical studies on just one cannabinoid drug, CR701, against chronic pain.

Like many clinical-stage biopharmaceutical companies, Cara is not profitable yet. It is increasing revenue, however. In the first quarter, the company's reported revenue was $8.1 million, nearly double what it was in the same quarter in 2019, mostly from its licensing fees and milestone fees connected to a license agreement with Fresenius (NYSE:FMS).

Finding the right stock for the right investor

Investors looking for a solid bet as a pure-play cannabis stock should latch onto Trulieve, which has shown it already has a winning formula for growth. Ironically, though they are not pure-play cannabis stocks, Cara Therapeutics and Arena Pharmaceuticals are both riskier as clinical-stage biopharmaceuticals. Of the two, Cara seems to be have stronger growth chances and may be more deserving of the risk.