Do you want to double your investment in one year? With the sudden rise of the marijuana industry, this is now a possibility. The full-blown legalization of the weed industry in Canada has made many investors wealthy. The result is a whole new set of promising stocks for you to take advantage of.

Despite the soaring popularity of weed stocks, however, the process of legalization has not been without its setbacks. Things in the marijuana industry seem to be looking up, and the future is promising. However, these are still relatively uncharted waters, and you need to be careful where you place your bets to help you win big.

Several cannabis stocks have created significant wealth for investors. Aurora Cannabis has returned 1175% in the last five years, while Canopy Growth is up 1400% since August 2014. Tilray went public in July 2018 and has gained just 10%, while Cronos Group is up 1900% since December 2014.

But past returns mean nothing for a potential investor. How does one select the perfect stock to buy and hold for the long-term? Here is where the Horizons Marijuana Life Sciences ETF (TSX:HMMJ) comes into play. It has a basket of top cannabis stocks and diversifies investor risk.

Indiva and TerrAscend partner to manufacture and process high-quality cannabis oil for TerrAscend patients and consumers

Harvest Health & Recreation (OTC: HRVSF) reported second-quarter results on Aug. 15. The vertically integrated marijuana dispensary saw revenue rise 39% sequentially to $26.6 million.

Shares of cannabis stocks large and small were beaten down after soft second-quarter results disappointed investors expecting soaring sales of recreational cannabis in Canada that haven't materialized. As a result, some of the world's largest cannabis companies have stock prices miles below their peaks. 

Has the market already pulled these cannabis kings down as far as it can, or could they sink even lower? Here's what to look for from each one of these formerly high-flying marijuana stocks. 

If American investors think that this is the right time to invest in a loss-making company just because its ticker is brand new, they might want to check the economic climate and wait for a serious Canadian contender to go public.

A defensive play amid recession fears

From hot-desking to cheap rides, the IPO gold rush has left some American stock portfolios looking like ghost towns this summer, with disappointment and burned fingers everywhere you look.

The reason?

It’s been one of the worst quarters for the marijuana market leader, Canopy Growth Corp. (TSX:WEED)(NYSE:CGC). Its stock has tumbled more than 40%, erasing almost all the gains it made this year.

No doubt, this downfall is coinciding with overall flight from risky assets to safety, but Canopy Growth has problems of its own, too. One recent example came this week when this pot producer reported its second-quarter earnings, missing big time on analysts’ expectations.

It hasn’t been a great year for those invested in the cannabis sector. Year to date, the Canadian Marijuana Index is down 15% and has been in a steady downtrend since February. The Index hasn’t been this low since the industry experienced strong tailwinds in late 2017.

It’s been almost two years and long-term investors are averaging negative returns. So why is this sector that holds so much promise underperforming the broader TSX Index?

It’s simple: bad news has dominated the headlines. Here are but a few of the newsworthy items that have plagued the sector:

A top analyst recently recommended buying Cronos Group (NASDAQ:CRON). But Piper Jaffray wasn't so bullish on Aurora Cannabis (NYSE:ACB), initiating coverage of the stock with a neutral rating. It wasn't too long ago, though, that analysts were much more positive about Aurora than they were Cronos.

Aurora has outperformed Cronos by a relatively small margin so far this year. Which stock is the better pick looking ahead? Here's what you need to know about how Aurora and Cronos stack up against each other.

Marijuana stocks took a huge hit this past Wednesday, as the Horizons Medical Marijuana Life Sciences ETF (which tracks the sector) fell 5.87% in a single day.

The day was a bad one for the TSX and for stocks worldwide, but weed stocks were hit worse than most: the TSX fell just 1.86% on the same date.

Between the CannTrust Holdings Inc (TSX:TRST)(NYSE:CTST) scandal and the weed industry’s continued profitability problem, things are looking pretty grim weed stocks. If you’re considering buying any, you should keep the following five facts in mind.