That old investing adage of "sell in May and go away" might have been good advice to follow for investors in the cannabis industry. Most cannabis stocks performed dismally last month. But not all of them were losers.

Three cannabis stocks managed to achieve solid gains in May: Namaste Technologies(NASDAQOTH:NXTTF) (TSXV:N), Cara Therapeutics (NASDAQ:CARA), and GW Pharmaceuticals(NASDAQ:GWPH). Here's how these stocks bucked the downtrend and whether or not they're smart picks to buy now. 

1. Namaste Technologies

Namaste Technologies has taken investors on a roller coaster ride in 2019. Shares of the cannabis-focused technology company more than doubled in the first nine days of the year. But the stock was down 37% for the year by late April after a scathing report by short-seller Citron Research led to Namaste uncovering issues that led to the ouster of CEO Sean Dollinger.

However, Namaste is definitely rebounding now. The stock vaulted 16% higher in May. Why? There wasn't a lot of news from the company, but the news it did have was positive.

After the embarrassing revelations that its former CEO had sold company assets to another Namaste Technologies executive, the company has been cleaning house. On May 24, Namaste announced the addition of a new independent board of directors member, named its first member of an advisory board, and appointed a new vice president of marketing and strategy. 

In addition, Namaste reported that two companies in which it owns sizable stakes, Choklat and CannMArt Labz, had submitted key license applications to Health Canada. Choklat applied to manufacture cannabis-infused edibles, while CannMart Labz applied for approval of its cannabis oil sales and extraction.

2. Cara Therapeutics

Cara Therapeutics only barely qualifies as a cannabis stock. However, the biotech does have a preclinical program that focuses on cannabinoid receptors -- and that's enough to land Cara a spot on several listings of cannabis stocks. Cara's stock gain last month of 8% was enough to rank it in second place among the top cannabis stocks in May.

However, Cara's nice jump had nothing to do with its cannabinoid program. Instead, good news for the company's lead pipeline candidate, Korsuva, provided a catalyst for the stock.

On May 29, Cara announced positive results from a phase 3 clinical study evaluating Korsuva injection in hemodialysis patients with moderate-to-severe chronic kidney disease-associated pruritus (CKD-aP). The drug passed the primary endpoint of the study with flying colors with a significant reduction in itching experienced by patients.

Cara does have another phase 3 study of Korsuva in treating CKD-aP patients on hemodialysis to complete, though. The company should report the results from this study later in 2019. Assuming all goes well, Cara might not be too far away from winning approval for its first drug.

3. GW Pharmaceuticals

Another biotech took the No. 3 spot among the top cannabis stocks in May. GW Pharmaceuticals' shares rose more than 4% last month, which was a great performance considering the overall malaise for the stock market.

Unlike Cara, GW actually focuses primarily on developing cannabinoid drugs. In 2018, the company's cannabidiol (CBD) drug Epidiolex became the first therapy made from cannabis plants to win approval from the U.S. Food and Drug Administration (FDA). 

Epidiolex was the main reason why GW Pharmaceuticals stock enjoyed a solid gain in May. The company reported better-than-expected sales for the drug in its first-quarter results announced early in the month. GW launched Epidiolex in November 2018 as a treatment for Dravet syndrome and Lennox-Gastaut syndrome (LGS), both of which are rare forms of epilepsy.

GW also announced positive results from a phase 3 study of Epidiolex in treating another rare type of epilepsy -- seizures associated with tuberous sclerosis complex (TSC). The biotech intends to submit for approval of this additional indication in the fourth quarter of 2019 

Are they buys?

My take on these three top cannabis stocks in May is reminiscent of the children's story about Goldilocks and the three bears. I think that one of these stocks is too hot, another is too cold, and one is just right.

Namaste Technologies is too hot for me. The company has intriguing growth prospects. However, there's simply too much volatility and too much uncertainty with this stock for it to be a great pick, in my view. 

I have liked GW Pharmaceuticals for quite a while, but my enthusiasm for the stock has cooled somewhat. It's not that I don't have high expectations for Epidiolex. Instead, my concern is that GW's market cap of $5.3 billion already reflects a lot of its growth potential over the near term.

That leaves the stock that I think is "just right" -- Cara Therapeutics. The latest results for Korsuva in treating CKD-aP in hemodialysis patients lowers the risk level for Cara considerably. Sure, the drug still must perform well in its second late-stage study, but I think its chances look pretty good for ultimately winning regulatory approval.

The peak annual sales potential for Korsuva in the CKD-aP in hemodialysis patients indication is around $500 million in the U.S. alone. Cara is also evaluating an oral form of the drug in treating CKD patients who aren't on dialysis and thinks there's an opportunity for Korsuva in treating chronic liver disease-associated pruritis (CLD-aP) as well.

Even with its big gains this year, Cara's market cap is still under $820 million. I think that the biotech's opportunities make it a stock to seriously consider buying.