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4 Stocks You Can Buy to Profit From the Rising Use of MMJ

Investors who get in on the oncoming marijuana “Green Rush” stand to make good gains.

They may opt for start-ups and early-stage companies developing cannabis-based products. But they may be better off investing in more established organizations. These larger companies have more resources to create new products, and there’s less risk for investors who buy their shares.

According to a report by the equity research firm Cowen & Co., marijuana will generate $50 billion in revenue by 2026.

Medical marijuana is now legal in 28 states. According to a report by the equity research firm Cowen & Co., marijuana will generate $50 billion in revenue by 2026. That's roughly eight times the estimated revenue this year.

Consider GW Pharmaceuticals (GWPH) . The U.K.-based biotech company develops cannabis-based treatments for serious conditions such as epilepsy and multiple sclerosis. GW Pharma has big-name partners that add an extra layer of legitimacy, as well. The company is working with Big Pharma players Novartis and Bayer to market one of its cannabis-based drugs. And it has already been eyed as a potential takeover target.

The company announced quarterly results on Monday, and although revenue fell due to a decrease in research and development fees, sales of its cannabis-based Sativex product are on the rise. GW Pharma also announced positive results from its Phase 3 study of another cannabis-derived treatment. Once Epidiolex, which treats severe forms of pediatric epilepsy, hits the market, this company's stock could soar.

Insys Therapeutics (INSY) is another drugmaker with the potential to score big from the rising use of medical marijuana. The Phoenix-based company produces a pain reliever based on a synthetic marijuana compound and has a market capitalization of more than $800 million. Insys might make an attractive takeover candidate.

If you'd rather pass on pure pharma plays, Microsoft and Oracle have created software to track legal marijuana production and sales. Both technology companies have diverse portfolios to pad them from any setbacks to marijuana legalization.

As marijuana goes mainstream, savvy investors should consider cannabis stocks for their portfolios.

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