The marijuana industry is getting bigger again. In November, Missouri and Maryland became the latest states to permit adult-use cannabis. And while those markets may not open up next year, they still represent the expansion of an industry that continues to defy the federal ban on pot in the U.S. Investing in 2023, ahead of the coming growth trajectory could lead to some great returns for patient investors.  

If you want to invest and take advantage of the industry's growth, investing in multi-state operators (MSOs) can be an excellent way to do so. And if you're wary about the risk, given that the AdvisorShares Pure US Cannabis ETF has declined by 54% this year, there are some potential bargains out there right now that can help minimize your risk. Two stocks trading at low price-to-sales (P/S) multiples that could be bargain buys are Cresco Labs (CRLBF -1.41%) and Ascend Wellness Holdings (AAWH -3.97%).

1. Cresco Labs

Cresco Labs is a bit of an underrated buy in the cannabis industry, despite the business generating more than $860 million in revenue over the trailing 12 months and being a big player in it. That's likely because Cresco isn't as aggressive with respect to growth as Curaleaf Holdings, which is in 22 states. The company also hasn't made a name for itself by dominating a top market in the way Trulieve Cannabis tries to saturate Florida. 

But it may not be long before Cresco becomes too big to ignore. The company is in the midst of acquiring another MSO in Columbia Care, a transaction that is set to complete next year. By 2025, the combined entity is projected to be in 18 U.S. markets, including 12 states that could be bringing in more than $1 billion in annual sales. And by then, Cresco projects it will be a leader in seven of the top 10 markets in the country.

Those are some impressive metrics that would certainly suggest that a premium should be warranted for the pot stock. However, both Columbia Care and Cresco trade at much lower P/S multiples than their peers.

CRLBF PS Ratio Chart

CRLBF PS Ratio data by YCharts

Given the low valuations of both of the stocks, Cresco looks like a bargain, especially with its strategic position in high-growth markets and what could be some excellent diversification down the road.

2. Ascend Wellness

The one stock that trades at a lower valuation than Cresco and Columbia Care on the chart above is Ascend Wellness. It doesn't have a looming acquisition that will make it a much bigger business, and its revenue over the trailing 12 months is a more modest $382 million. In its most recent quarterly results, for the period ending Sept. 30, Ascend's sales totaled $111 million and rose 14% year over year. 

What I like about the business is that Ascend picks its spots carefully. The company has 23 dispensaries across six states, which is modest compared to some of the big names in the industry; Trulieve has more than 100 in Florida alone. Ascend's still in some top markets, however, including Massachusetts, New Jersey, Pennsylvania, Ohio, Michigan, and Illinois. 

The company has some key flagship locations that could be pillars for its growth. In Massachusetts, it has a downtown location near TD Garden where the Bruins and Celtics play. In New Jersey, its Fort Lee location is near the George Washington Bridge. Those are some potentially high-traffic areas that can help the company bring in excellent growth, particularly in New Jersey, which is a relatively new recreational market that just opened up this year. And while it's not technically in New York, by being right next to the bridge connecting the two states, it may have the next best location.

Ascend is another underrated stock to buy that cannabis investors shouldn't pass up.