Canada is emerging as an early global leader in the high-growth cannabis industry.

Medical cannabis has been legal in the country of 30 million since 2001. Then, in 2014, Canada implemented sweeping regulatory changes that set the stage for its young cannabis industry to prosper. Since then, the industry has been booming. Sales topped $1 billion in 2016.

Today, Canada's high-growth cannabis industry is about to get another huge boost. Canada just announced plans to legalize recreational cannabis by July of 2018. That would make Canada the first developed country in the world to legalize both medical and recreational cannabis.

It's also set to unleash a multibillion dollar industry. Cannabis sales are expected to be between $5 and $7 billion in the first 12 months after legalization. That would be between a 400 percent and 600 percent increase from 2016.

According to consulting firm Deloitte, this could generate up to $23 billion in economic activity. That would be more than beer and wine combined.

If you want to learn how you can potentially profit from this cannabis revolution, let me tell you about Canada's legal monopolies -- an exclusive group of companies that have been issued a commercial license to cultivate and sell cannabis.

Health Canada Is Creating Legal Monopolies In The Cannabis Industry 
Health Canada is the agency that regulates Canada's cannabis industry. If a company wants to cultivate and sell cannabis, it must go through a rigorous application process with Health Canada.

As expected, demand for these permits is through the roof. Hundreds of companies are scrambling to get their hands on one. However, Health Canada is deliberately limiting supply. From early 2014 to today the total number of permits only grew from 12 to 35.

Health Canada is deliberately choking back the number of permits it issues in order to increase the profitability of current permit holders because it has a vested interest in their success -- after all, profitable companies pay taxes.

Looking forward, with billions in new sales set to flow into the industry in the next few years, companies that own or receive new permits are sitting on a winning lottery ticket. These companies are set to deliver record sales and earnings for at least the next four to five years.

When it comes to investing in cannabis stocks, I recommend diversification. Cannabis stocks can be unpredictable in the short run. If you want some more pointers on investing in cannabis stocks check out my recent article -  7 Essential Tips for Investing in Cannabis Stocks .

In the meantime, with diversification in mind, here are seven of the largest Canadian cannabis companies to help you get started. These are among the exclusive companies that own permits.

7 Canadian Cannabis TSX Stocks

From the group I have chosen to highlight Aurora Cannabis, because of it has one of the best legal monopolies, and Organigram, because of its expertise in organic cultivation.

Aurora Cannabis (CVE: ACB) is one of the largest Canadian cannabis companies with a market cap of $813 million. Shares trade on the Toronto Venture Stock Exchange under the ticker symbol ACB and in OTC markets in the US under ticker symbol ACBFF.

Right now Aurora is the only company with a cannabis permit in the entire province of Alberta, home to four million people and the heart of Canada's oil sands industry.

Aurora is up 469% in the last 12 months. Take a look below.

Organigram Holdings (CVE: OGI) is also one of the largest medical cannabis companies in Canada with a market of $286 million. Organigram was one of the industry's only certified organic growers. In February, Organigram ended up losing its organic certificate after some product recalls.

In the short run, shares fell a bit on the news. But in the long run, I believe Organigram will regain its organic designation. And these kinds of missteps are not uncommon for young companies operating in high-growth industries.

Shares of Organigram are up 109% in the last 12 months.

Risks To Consider:  Investors are enthusiastic about cannabis stocks. A lot of sales growth and future good news has already been priced into shares. These companies will need to deliver impressive sales growth in order to justify the sectors higher valuation.

Action To Take: Canada is set to legalize recreational cannabis by July of 2018. An exclusive group of seven legal monopolies are set to cash in. I am expecting these stocks to be volatile. Buy now, don't sweat short-term volatility, and focus on the big picture.