One sector that's undoubtedly gone from bubble territory to flat-out deflated is cannabis. Many producers saw valuations skyrocket upon the federal legalization of cannabis in Canada in late 2018. Of course, the ensuing bubble, which lasted for most of 2018 and some of 2019, is a mania many have moved past.

But this sector has also seen impressive uptake in recent years, growing at a respectable rate, with valuations that are (finally) starting to jibe with reality. There are some great growth opportunities to be had for investors with the patience to avoid looking at their portfolios on a day-to-day basis.

Here are three of the top cannabis stocks I think are worth buying and holding for the next decade.

Curaleaf: A U.S. MSO with impressive revenue growth

U.S.-based multi-state operators (MSOs) like Curaleaf (CURLF -4.30%) have certainly had a rough go over the past two years. Trading above $16 per share in February 2021, Curaleaf stock now trades under $4 per share. 

However, over the past two years, Curaleaf has seen some very impressive growth. Revenue has more than doubled over this period, with gross profits increasing by a similar amount. The company hasn't been able to turn a net profit, but its earnings before interest and taxes have increased, albeit at a slower rate than revenue growth.

Curaleaf has proven to be a sector outperformer, for what it's worth. Compared to the AdvisorShares Pure U.S. Cannabis ETF Curaleaf's one-year decline of approximately 40% is much better than the more than 65% decline seen in this exchange-traded fund over the past year. 

As the U.S. adult-use cannabis market continues to grow, and more states legalize cannabis for recreational use, Curaleaf stands to benefit perhaps the most from this growth. That's because the company's vertically integrated business model is scalable, and has already shown proof of concept with respect to its previous rollouts. For example, Connecticut's adult-use market is estimated to be worth over $215 million in the first year. As Curaleaf continues to expand into new markets, I anticipate the company's growth trajectory is likely to remain intact.

Canopy Growth: A Canadian cannabis company with a valuation that makes sense

Canada-based Canopy Growth (CGC -2.95%) is the first of two foreign stocks included on this list. As mentioned, Canada legalized cannabis federally for recreational use in 2018. Accordingly, Canopy Growth (formerly Tweed) stock saw an incredible surge on this news, given its roots in the Great White North.

Unfortunately for investors who bought in near the peak hysteria, realized growth in terms of recreational use hasn't really panned out according to initial estimates. Previous estimates in 2017 called for the Canadian cannabis market to be between $4.2 billion Canadian dollars and CA$6.2 billion in 2018. Fast forward five years later, and Canadians only spent CA$4.5 billion in 2022 (near the low point of the initial range five years ago).

It's no wonder then that Canopy Growth and its Canadian peers have been slammed over the past few years. That said, while Canopy's previous valuation was grossly exaggerated, its current valuation seems a lot more palatable. Trading at around 3.2 times sales (compared to 7.7 times at the end of 2021), the company has felt its fair share of valuation compression due to sector-specific and macro forces alike.

As one of the largest cannabis companies in Canada, with some exposure to the U.S. market, Canopy Growth provides investors with perhaps one of the most stable options among the generally highly volatile international players in this segment. That's because this is a company with valuation and growth metrics that continue to remain robust, despite declining sector-wide numbers. Relative to its peers, Canopy remains one of the highest-quality cannabis companies in terms of fundamentals right now. 

Aurora Cannabis: Great geographical diversification 

Another leading Canadian cannabis option, Aurora Cannabis (ACB -2.71%), has also been a very unprofitable investment for its long-term shareholders in recent years. Many of the same issues and headwinds apply.

That said, I think Aurora is among the more unique players worth a look at for those seeking multibagger potential in the coming decade. This is a company with a strong presence in its domestic Canadian market. However, from a geographical and product-specific perspective, Aurora has done a good job of diversifying its offerings in a number of ways.

The company serves both wholesale and retail markets in the European Union, Australia, the Caribbean, South America, and Israel. In the U.S. market, Aurora has taken significant market share in the niche hemp-derived CBD market. And in Canada, Aurora has a significant market share in both retail and wholesale channels.

As far as vertical integration goes, Aurora is among the best options in this sector. One of the aspects I like best about the company's business model is its increased focus on value-added products such as oils, capsules, edibles, extracts, and the like. If legalization ever takes hold in the U.S., Aurora is a company with a product and brand portfolio that's able to serve many market segments. That's something for long-term investors to think about.

If you don't mind a little fire, these stocks could spark your portfolio

Overall, the cannabis sector remains a highly speculative one. That said, as the saying goes, no risk, no reward.

Long-term investors looking to add a small slice of portfolio exposure to this sector may want to dive into these three options. They're each unique players in their respective markets, and ones I think could lead the way in terms of capital appreciation, if and when the next bull market begins.