There is no such thing as a risk-free investment in the stock market (or anywhere else, for that matter). However, some carry more risks than others. Many investors choose to stay away from those companies that seem too much like longshots.

But others actively seek out those stocks that the market characterizes as too risky, as the potential rewards are often mouthwatering. If you belong to the latter group, here are two stocks that are a bit on the risky side, but could deliver huge gains if their respective prospects pan out: Planet 13 Holdings (OTC:PLNH.F) and Cassava Sciences (NASDAQ:SAVA)

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1. Planet 13 Holdings

Wall Street analyst Owen Bennett recently called the U.S. marijuana industry a "generational wealth opportunity." Whether you agree with the exact wording of this assessment or not, there is no denying that many pot stocks do offer massive growth potential. And among these companies, Planet 13 Holdings arguably has one of the most innovative business models.

The company isn't content with selling cannabis products. Instead, Planet 13 offers its customers a whole experience in its superstore, located on the popular Las Vegas Strip. Cannabis enthusiasts can witness firsthand the company's cannabis production process, purchase various marijuana products, and relax in the restaurant located right inside.

With a growing number of people fully vaccinated against COVID-19, foot traffic and tourism in Las Vegas are picking up, and Planet 13 is benefiting. The pot company reported record monthly revenue of $9.7 million in March. It went on to beat that record in April when it racked up $10.7 million in revenue. It beat that record once again in May with monthly revenue of $11.2 million.

Planet 13 recently opened another superstore in California, the largest U.S. state by population. The company has ambitions to open more of these cannabis-focused entertainment complexes in major cities in the U.S., including New York City, Washington D.C., and Miami.

This master plan isn't guaranteed to work. The cannabis industry in the U.S. is very competitive, with several companies expanding their footprints across more than a dozen states. Some of these companies generate quarterly revenue and profits much higher than those of Planet 13. Also, opening these new stores in other states will cost money, and will come with additional expenses once they are operational.

Management's goal of opening more than eight new superstores in the next five years might be doable, and the company is betting that these stores will see the same success as the one in Las Vegas -- which is by no means a sure bet. Planet 13 remains a small-cap company with a market cap of just $1.2 billion, and that's after its shares soared by 184% in the past year.

If Planet 13 goes on to execute its long-term plan, those who purchase this cannabis stock today will be glad they did so down the road.

Mature person sits in a red chair in front of a large window, contemplating something while looking at a tablet.

Image source: Getty Images

2. Cassava Sciences

Shares of clinical-stage biopharma company Cassava Sciences are up by a cool 3,285% in the past year. What's behind this performance? The drugmaker's leading pipeline candidate and investigational Alzheimer's disease (AD) drug, simufilam. This medicine has produced promising data in clinical trials. In a phase 2b study, the results of which Cassava Sciences announced in September 2020, simufilam was shown to improve several biomarkers of AD in patients with the disease.

According to the company, "the ability to improve multiple biomarkers from distinct biological pathways with one drug has never been shown before in patients with Alzheimer's disease." In early February the company also announced results of an interim analysis of an open-label study for simufilam. The medicine successfully improved AD patients' cognition and behavior.

Even though these results are encouraging in and of themselves, investors have also taken interest in Cassava Sciences because of the recent controversial approval of Biogen's AD drug Aduhelm. Simufilam doesn't work the same way as Aduhelm -- the latter focuses on removing amyloid plaques in the brain (some experts believe the buildup of the beta-amyloid protein is one of the causes of the disease). Meanwhile, simufilam is designed to restore the normal shape and function of filamin A, a protein in the brain which, in an altered form, is thought to be linked to AD.

So what makes Cassava Sciences a risky stock to buy? 

Before the approval of Biogen's Aduhelm, there have been a long list of failed attempts at developing successful treatments for AD -- and some of these potential medicines had also produced great results in phase 2 studies. Aduhelm became the first AD drug approved since 2003. And even then, some experts believe this decision by the U.S. Food and Drug Administration (FDA) was a bad one.

At least three members of an independent panel convened last year by the regulatory body to discuss Aduhelm have resigned from their roles following the drug's approval. Potential failure from clinical trials is always a risk biotech investors have to worry about. But in this case, the risk seems significantly higher than normal -- though that also means the potential rewards could be huge.

Cassava Sciences said it would initiate a phase 3 study for its lead candidate in the second half of the year. The trial will "evaluate disease-modifying effects of simufilam in Alzheimer's disease." Results could come in sometime next year. If they are positive, expect Cassava Sciences shares to soar. But if they are negative, the company's stock could fall off a cliff. Investors comfortable with the risk should consider initiating a (small) position in this healthcare stock.

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.