The cannabis industry is one of the fastest-growing markets around. According to some estimates, the sector will expand at a compound annual growth rate of 26.7% through 2028. No doubt many pot companies will profit from this trend.

And it provides an exciting opportunity for investors: Picking the right cannabis stocks right now might turn out to be an excellent move. With that as a backdrop, here are two leading pot companies that are worth adding to your portfolio: Trulieve Cannabis (TCNNF -6.41%) and Innovative Industrial Properties (IIPR -0.27%)

Trulieve Cannabis (TCNNF) stock chart.

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1. Trulieve Cannabis 

In the third quarter, Trulieve Cannabis reported strong financial results, recording its 15th consecutive profitable quarter. That may not seem that impressive, but let's put things in context: Most pot growers on the market have struggled to show green on the bottom line for even a handful of reporting periods. Trulieve Cannabis' accomplishment is commendable by comparison to its peers. The company's revenue during the quarter soared by 64% to $224.1 million.

Meanwhile, its net income came in at $18.6 million, 7% higher than the year-ago period. One secret behind Trulieve Cannabis' success is its strong presence in the state of Florida. It boasts 105 retail dispensaries in the sunshine state and a whopping 50% of the market share as of Oct. 1, 2021. But Trulieve Cannabis has expanded beyond Florida.

In October, it closed its acquisition of Harvest Health and Recreation -- an Arizona-based pot grower -- in an all-stock transaction valued at roughly $2.1 billion.

Person carrying jar with cannabis flower inside a store.

Image source: Getty Images.

The deal helped Trulieve Cannabis establish deeper footprints in the U.S. pot market, particularly in the West and Northeast regions where Harvest's business focuses. Trulieve Cannabis' total addressable market will reach $19.3 billion by 2025, thanks to this acquisition. Of course, there are plenty of other companies that are fighting for market share. However, with a leading 155 retail dispensaries, Trulieve Cannabis is one of the top dogs in the fast-growing U.S. marijuana industry.

Trulieve Cannabis has proven that it can routinely deliver strong financial results, despite the legal barriers pot companies face in the U.S. (the substance remains illegal at the federal level, and it cannot be transported across state lines). A friendlier legal environment would work wonders for the company, but even without that, Trulieve Cannabis looks in an excellent position to continue beating the market. 

2. Innovative Industrial Properties

While cannabis legalization at the U.S. level would be a welcome sight for Trulieve Cannabis, some argue that the same does not hold for Innovative Industrial Properties. This medical cannabis-focused real estate investment trust has gained tremendous success by taking advantage of the fact that cannabis companies in the U.S. have a hard time accessing traditional banking services. Here is how Innovative Industrial Properties' business works.

The company acquires real estate properties from cannabis companies and leases them back to these same businesses. Thanks to this model, pot growers can free up some capital. However, legalization at the federal level would allow cannabis companies to do business with banks, disrupting Innovative Industrial Properties' progress. But in my view, these concerns are overblown. First, despite cannabis legalization gaining increasingly widespread support, it doesn't look likely to happen anytime soon.

Second, even if it does, that will only help lift an already booming cannabis industry. Dealing with banks has its pros, but it also comes with disadvantages, including potentially hefty interest rates. That's why cannabis companies will continue to turn to Innovative Industrial Properties, whether or not the substance is legalized at the federal level. And given how successful the company has been so far, the future looks bright.

In the third quarter, Innovative industrial Properties reported revenue of $53.9 million, 56.9% higher than the year-ago period. The company's net income of $29.8 million grew by 57.6% compared to the prior-year quarter. Innovative Industrial Properties owns 73 properties in 18 states. Meanwhile, medical cannabis is legal in 36 states, which gives plenty of room for Innovative Industrial Properties to expand its presence -- and with that, grow its revenue and earnings.

That's why Innovative Industrial Properties looks well-positioned to continue beating the market, making it an ideal cannabis stock to buy and hold.