The market for marijuana stocks has cooled off considerably since 2018 began, following a feverish rally that closed out 2017. For one, the date that many expect recreational marijuana will be sold through retail outlets has been pushed back by at least a month — if not longer. News like that will tend to dampen the mood somewhat — particularly in light of the euphoria that has surrounded this newly minted industry over the past two years. One thing is clear: the pot industry will be large and formidable. Estimates vary, but most agree that once the federal government has…

The market for marijuana stocks has cooled off considerably since 2018 began, following a feverish rally that closed out 2017. For one, the date that many expect recreational marijuana will be sold through retail outlets has been pushed back by at least a month — if not longer.

News like that will tend to dampen the mood somewhat — particularly in light of the euphoria that has surrounded this newly minted industry over the past two years.

One thing is clear: the pot industry will be large and formidable.

Estimates vary, but most agree that once the federal government has had time to snuff out the black market and replace it with growers licensed by Health Canada, pot sales will be in the billions — likely somewhere between $5 and $10 billion annually, and on par with the size of Canada’s beer market today.

So, it’s very easy to understand why investors are excited — and it’s hard to blame them, too.

But are marijuana stocks a good investment at today’s prices? That’s a different story altogether.

Companies like Aphria Inc. (TSX:APH), Aurora Cannabis Inc. (TSX:ACB), and Canopy Growth Corp.  (TSX:WEED) have certainly come a long way since they first became publicly traded.

Canopy Growth today is the largest, with a market capitalization just shy of $6 billion, about $1.5 billion ahead of Aurora Cannabis.

It’s certainly impressive, not to mention very lucrative if you happened to be one of those Foolish enough to get in on the green rush.

But even with talk of ambitious plans for international expansion to markets that are still a few steps behind Canada’s legalization process, like Chile, Germany, and Australia, for example, a +$10 billion valuation for the two largest companies alone suggests a lot of that potential has already been accounted for.

You could buy a couple of pot stocks and stash them away for another decade or so, but keep in mind this is still a very new industry with a lot of work ahead of it that still needs to be sorted out.

The key elements to any company’s long-term success, like distribution, supply chain management, sales and marketing, and operations, have yet to truly be tested by any of these marijuana companies beyond the much smaller medical market that exists today.

Canopy Growth — if only because of its sheer size and the inherent advantages that gives the company and its management — stands as good a chance as any to emerge as a leader of the pack.

I’ve bought Canopy Growth in the past, and I’ve made some good money owning it. But I don’t own the stock now.

If I were going to seriously consider getting back into the stock, which I think could be one of the eventual winners of the new industry, I’d be looking for something closer to the $20 range for my money.