When California legalized the use of the recreational marijuana, it had a positive impact on the stock markets. At present, only 36 states and the District of Columbia have made marijuana legal. Investors have started exploring options for trading in marijuana stocks as some more states are planning to legalize marijuana.

Marijuana is a psychoactive drug obtained from the cannabis plant and is used in smoking. Most stock analysts are a little apprehensive about investing in marijuana stocks and are taking things little slow.

What to expect from marijuana stocks
There are total 39 marijuana stocks listed under the marijuana stock index. Markets are hoping marijuana stocks will rise and shine, bringing new hope for investors. Some of the top trading marijuana stocks are Canopy Growth Corp with a market cap of around $4.36 billion, GW Pharmaceuticals holding a market cap of around $3.13 billion, and MedReleaf with a market cap of around $1.23 billion. These are pharmaceutical companies, which develop new food and drug administration (FDA)-approved drugs with a little use of marijuana.

Surprisingly, marijuana stocks have shown an impressive growth of 332% on an average over the last year. These stocks have achieved a feat, which is hardly the case with other stocks. As investors are looking for higher potential in these marijuana stocks, more companies have come forward to join the marijuana bandwagon.

Investors can also invest in marijuana grower stocks as there are more chances of these companies getting orders for the plant. Marijuana has become one of the booming industries across the country. It is indeed a good time to add marijuana stocks to your portfolio as most states are planning to legalize marijuana.

Pitfalls of investing in marijuana stocks
Even though some marijuana stocks are still a risky proposition to investors, it is slowly catching up on the market sentiments. On the federal front, marijuana stocks are still an illegal entity. Some marijuana stock companies are not listed on all the stock exchanges in the country.

Investors still fear that the whole marijuana stock euphoria is a bubble waiting to be popped. All this sudden talk about marijuana stock has seen a surge in its pricing, making it an expensive proposition. Investors believe that these stocks are often over-valued. Right now, it is advised to invest in marijuana stocks with caution as any political turmoil can make the stock volatile.

The US and Canada markets are expecting more market capitalization of marijuana stocks. Amidst the risky market conditions, more marijuana start-ups are expected to join the markets. More buyouts and acquisition of cannabis plants are emerging. As of now, the pharmaceutical companies such as Scotts and AbbVie that use marijuana for developing medical drugs are doing well.

Although investors are optimistic that more states will pass the marijuana bill, there is still uncertainty surrounding the future of marijuana stocks. If marijuana is legalized in all states, there is immense potential for those wanting to invest in marijuana stocks.