A big drawback of investing in cannabis is that, right now, it's a risky industry to be putting your money into. Many businesses aren't profitable, and fund their growth through equity, or share, offerings, diluting current investors in the process. As a result, their stock prices have been crashing. In just the past year, the Horizons Marijuana Life Sciences ETF has declined by more than 50%. Although the S&P 500 has struggled, it's down a more modest 16% over that time frame. 

There is significant upside for pot stocks in the long run, but it can be difficult, if not impossible, to predict which cannabis companies will stick around given the industry's current struggles. A safer option for investors is to target large companies that have exposure to the cannabis industry.

A top growth stock to consider

One stock cannabis investors should keep a watch out for is convenience store giant Alimentation Couche-Tard (ATD 2.23%) (ANCT.F 2.84%). The Quebec-based business operates in 24 countries and territories around the globe and it has more than 14,000 stores, with many falling under its flagship Circle K banner, a key rival to 7-Eleven. The company has generated $68 billion in revenue over the trailing 12 months and posts consistent profits.

ANCTF Revenue (Annual) Chart
Data by YCharts.

The company has grown through acquisitions and by adding to its store count. But one area it has always been focused on is cannabis. As early as 2017, before Canada would legalize recreational marijuana the following year, the company was eyeing the possibility of selling pot in its stores.

Couche-Tard has partnered with multiple cannabis companies

One way it has attempted to gain exposure to the cannabis industry is by partnering with marijuana businesses. It has a 35% stake in cannabis retailer Fire & Flower, which owns more than 90 pot shops across Canada. In Canada, convenience stores can't stock marijuana products and so Couche-Tard has done the next best thing, announcing a pilot program last year where Fire & Flower would launch new locations next to Circle K stores.

A similar program has piloted in the U.S. In October, it announced that in Florida, Circle K gas stations will sell medical marijuana. It reached the deal by partnering with multi-state marijuana operator Green Thumb Industries. Initially, the rollout will involve 10 stores but with Couche-Tard having 600 locations within the state, there's massive potential there for Couche-Tard. And with Green Thumb having a presence in 15 key U.S. markets, this is a partnership that could help extend beyond just Florida.

Why Couche-Tard makes a lot of sense for risk-averse investors

The big advantage for investors is that with Couche-Tard, the risk is minimal. In each of its past three fiscal years (they end in April), Couche-Tard has generated a profit of at least $2.3 billion. It has also accumulated at least that much in free cash flow. 

While Couche-Tard isn't a stock that may be all that familiar in the cannabis industry, it's one that could rise in popularity as it expands its positions in the market. With partnerships involving Green Thumb, Fire & Flower, and Canopy Growth (the pot producer has since announced that it is divesting of its retail business), Couche-Tard has shown that it is eager to step into the cannabis retail business, albeit indirectly for now.

For investors who want a safer option to gain exposure to cannabis, Couche-Tard is an underrated stock to consider. Trading at less than 17 times earnings, which is in line with the average stock on the S&P 500, Couche-Tard is an attractive stock to buy and hold for the long haul.