Lately, many investors have given the cold shoulder to Canadian marijuana stocks because of that market's many challenges, and the fact that these businesses cannot sell directly to the massive customer base that is the U.S. One bright spot in that haze, though, is New Brunswick-based OrganiGram Holdings (OGI 3.40%), which delivered some impressive numbers in its recently reported third quarter.

In this discussion from Motley Fool Live recorded July 16, veteran Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina dive into these results and briefly discuss the company's rosy outlook for its future performance.

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Corinne Cardina: All right, we are going to dive into some pot stocks by name and we will start with one that just reported their third-quarter results, OrganiGram. Can you remind us what this company is and then we will talk about their earnings?

Eric Volkman: Yeah. They're a Canadian vertically integrated company. Being based in Canada, I would say prior to this year, they had struggled with that market's limitations.

First of all, Canada is a much smaller country than the U.S. The total market there is not very large. I think it's something like, I don't have the figures in front of me, it's something like a population of 25 million and that's less than the population of California. At the same time, you have a lot of companies chasing the same market segments. You have a bunch of vertically integrated players like OrganiGram.

Also, the black market is real challenge in Canada. It's a challenge down here in certain markets too, but particularly in Canada where [marijuana] is taxed fairly heavily. At times, dispensary licensing has been sluggish or even non-existent, so it's hard for people if they live far away from the dispensary, to access legal channels.

Things have been getting better in Canada, and this is reflected in OrganiGram's improvement lately. In their most recent quarter, which they just published results of, this quarter three, net sales were up 39% on a quarter-over-quarter basis -- which is really nice -- to just over 29 million Canadian dollars ($23.3 million).

Because things have improved there, dispensary licensing has finally gotten better. It only took them about three years to do that, particularly in Ontario, which is by far the largest and most prominent and, I would imagine, wealthiest out of the 10 provinces. Because new dispensaries are coming onstream and fairly quickly, OrganiGram was able to pump its recreational sales 40% higher, and that's due in no small part to those factors.

New products also helped. The company has not been lazy to introduce new and interesting items on the shelves. This includes two high potency strains; there's always a niche market in marijuana for high-potency product.

They narrowed their loss considerably. It was only 4 million Canadian dollars in quarter three as opposed to the year-ago shortfall of nearly CA$90 million ($72.2 million). That's a pretty drastic improvement. They're not profitable yet, but these are very impressive growth numbers. They were higher than expected.

The company believes that revenue growth momentum will continue, again, given the factors I just mentioned, like more dispensaries coming on-stream and the legal regime getting a little better. This is a company to watch.

I'm still not crazy about the Canadian companies. Again, let's always remember that they're limited. They can't yet sell directly to the U.S. market, which is big handicap. This is a monster market down here and if you can't get your hands on it, you're kind of hemmed in.

But those sales numbers are very noticeable, very encouraging. OrganiGram, again, among a lot of Canadian companies is a company to watch.