In the lead-up to the October 2018 legalization of recreational marijuana in Canada, cannabis stocks were on a tear. So much so, it was difficult to find a marijuana stock trading at seemingly fair valuations. None of the weed companies had even started to generate revenues from recreational marijuana sales, but investors were optimistic.

We’re now into earnings season, and pot stocks have been reporting their first round of quarterly results that include sales from recreational marijuana. It’s time for cannabis players to justify their lofty valuations with equally frothy revenue growth.

While the biggest players are garnering all of the attention, there are a number of marijuana penny stocks reporting impressive numbers.

While many view the Canadian marijuana market as only focused on the companies who grow marijuana, there is a large amount of potential beyond this smaller scope. Many businesses have been able to see success by providing more than just raw cannabis to the consumers, albeit as well as plain old cannabis.

One thing that investors should keep in mind, however, is the high amount of volatility in the market overall. This has been one of the biggest barriers to entry for many institutional investors. Despite this notion, however, many companies have seen their fluctuations decline in the past few months as the market begins to stabilize.

There's been no industry hotter to start the new year than marijuana. Now a legitimate business model following the legalization of adult-use cannabis in Canada this past October, the highly followed Horizons Marijuana Life Sciences ETF, which holds around four dozen pot stocks, is up 60% year to date through the end of February.

If it feels as if marijuana stocks can do no wrong of late, you'd be right. Since the year began, the Horizons Marijuana Life Sciences ETF, the first-ever cannabis exchange-traded fund in Canada, has risen by 60%. Although gains in February were considerably more subdued relative to January, this popular ETF still tacked on an 8% gain last month.

Among individual pot stocks, things weren't nearly as bullish in February as they were in January, when you could have seemingly thrown a dart with a blindfold on and made money. Of the 50 marijuana stocks I screened, 24 fell last month, with 26 advancing. That's a pretty even distribution.

The marijuana industry is kicking tail and taking names through the first two months of 2019. The broad-based Horizons Marijuana Life Sciences ETF is up more than 50% year to date, and pot stocks have gathered plenty of momentum following Canada's legalization of recreational weed in mid-October of last year.

How long would it take for a stock to deliver a 50% gain for you to consider it a winner? Some might say five years. Others would like a three-year big return. But what would you think about a stock that has soared over 50% in just two months and is up more than 730% in less than five years?

Aurora Cannabis (NYSE:ACB) is such a stock. Most investors would readily conclude that the Canadian marijuana grower has been a big winner. But you've no doubt heard it plenty of times: Past performance isn't necessarily indicative of future results. Is Aurora Cannabis a stock to buy now? 

When it comes to drugs, politicians agreed: Cannabis should be legalized. Mind you, for medical use. In Switzerland has passed the Motion Kessler in the previous year, the Council of States and national Council. Now the Federal Council on the train to write the law.

In Israel, has voted in February, a clear majority of the Knesset, with no votes against for the legal cultivation and Export of cannabis. The Cannabis industry has boomed prior to the recent Initiatives in both countries, partly under unclear legal conditions. Now you experienced your first High.

If you're on the hunt for a great marijuana stock to buy, remember that sometimes taking the road less traveled is the best choice. Big Canadian marijuana producers get the most attention. That makes sense in some ways because of the excitement over the Canadian recreational marijuana market. But smaller marijuana businesses that focus on the U.S. could be even smarter picks.

You might not think of Canopy Growth (NYSE:CGC) and Charlotte's Web Holdings (NASDAQOTH:CWBHF) as rivals. And they're not -- at least not yet.

Canopy Growth, of course, is the biggest marijuana grower in the world in terms of market cap. It's active in multiple countries but doesn't market any products in the U.S. at this point. Charlotte's Web is well known in the U.S. for its hemp products.

Having long been considered a taboo industry, cannabis is no longer. Last year, Canada became the first industrialized country in the world to legalize recreational weed, and just weeks later a handful of U.S. states gave the green light to medical or adult-use pot during midterm elections. Today, two-thirds of U.S. states have approved marijuana in some capacity, with 66% of respondents polled in Gallup's October 2018 survey favoring the idea of legalizing marijuana.