Many cannabis stocks have fallen well below their highs set earlier this year. Volatility in the overall stock market reflects a lot of uncertainty, with worries about the possibility of a recession and an intensifying trade war. The combination of these factors could make some investors afraid to buy any stock, much less a marijuana stock.

But taking a long-term view makes investing a lot less scary. If you think that the pot industry will expand dramatically over the next decade or more, investing in marijuana stocks during times of uncertainty could actually increase your returns over the long run.

Which cannabis stocks look like good picks to buy in September? Here's why I think Charlotte's Web Holdings (OTC:CWBHF), Cresco Labs (OTC:CRLBF), and Trulieve Cannabis (OTC:TCNNF) stand at the top of the list.  

1. Charlotte's Web

Charlotte's Web stock sank earlier this month after the company reported second-quarter results that missed analysts' revenue and earnings estimates. However, shares of the cannabidiol (CBD) leader are still up more than 50% year to date. More importantly, the prospects for Charlotte's Web continue to look very bright.

For years, Charlotte's Web operated in kind of a gray area. Federal laws were on the books that allowed states to sanction the use and sale of hemp-based products for research purposes. Charlotte's Web was permitted to sell its hemp CBD products under these regulations. But a new law went into effect in December 2018 that legalized hemp in the U.S. without the research purposes restriction. Charlotte's Web's business skyrocketed.

The company already ranks as the No. 1 hemp CBD brand in the U.S. by market share. And that market is rapidly expanding. The company has nearly tripled its acreage of hemp this year compared to 2018. Charlotte's Web's products are carried in over 8,000 retail locations, more than double the number at the beginning of this year.

Charlotte's Web continues to be consistently profitable, although it's understandably investing more in building its infrastructure to take advantage of its growth opportunities. The company's new CEO, Deanie Elsner, a former executive at Kraft Heinz and Kellogg, appears to be a great fit for what Charlotte's Web needs at this stage. I view Charlotte's Web as one of the best cannabis stocks to profit from what should be tremendous growth in the U.S. hemp CBD market.

2. Cresco Labs

Cresco Labs ranks as one of the largest vertically integrated marijuana operators in the U.S. It currently has operations in seven states that have legalized medical cannabis, notably including Cresco's home state of Illinois.

The company will soon add four more states. Cresco has binding transactions pending to acquire operations in Florida, Massachusetts, and New York. It also received approval to expand into Michigan.

But the biggest deal for Cresco is its pending acquisition of Origin House, which is the largest cannabis distributor in California. Origin House also markets a line of its own marijuana brands and owns a vape retailer in Canada. 

Cresco's revenue continues to skyrocket and will soar even more with its acquisitions and moves into new states. The company isn't profitable yet, but that's mainly because its spending is increasing as it expands rapidly. Cresco thinks the Origin House acquisition will make it a "North American cannabis powerhouse." I agree.

3. Trulieve Cannabis

Trulieve Cannabis focuses primarily on the medical marijuana market in Florida. The company now operates 31 dispensaries in the Sunshine State. It also offers home delivery for patients who can't get to a physical store.

This focus on Florida makes a lot of sense. The state is projected to be the third-largest legal cannabis market in the U.S. by 2022 with annual sales of more than $1.7 billion, ranking ahead of several states with legal recreational marijuana markets.

Although Florida doesn't allow the legal use and sale of recreational pot at this point, it could be on the way to doing so. An effort is underway to put a constitutional amendment on Florida's ballot in 2020 to legalize recreational marijuana. If the amendment makes it on the ballot, the chances of passage appear to be pretty good, with a recent survey finding that 65% of Floridians support legalization.

Trulieve would have an even greater growth opportunity should these efforts succeed. But the company doesn't need a legal recreational market to grow. Trulieve reported record revenue and earnings in its latest quarterly update. It should be in a solid financial position to fund additional expansion in Florida and other states. 

Common denominator

You might have noticed that all three of these cannabis stocks have a common denominator: They're all based in the U.S. That's not a coincidence. 

I think that U.S. marijuana stocks are undervalued relative to their counterparts in Canada. This doesn't make every U.S. cannabis stock a great choice. However, the growth prospects and solid business models for Charlotte's Web, Cresco Labs, and Trulieve make these three stocks stand out as good picks for long-term investors to consider buying in September.

According to an interesting new study, when CBD is taken along with fatty foods, absorption rates are increased up to 14 times.

The study, published in June in the Epilepsia Journal, was entitled “Food effect on pharmacokinetics of cannabidiol oral capsules in adult patients with refractory epilepsy.” The study looked at the difference between taking CBD in oral form with a high-fat meal as compared with fasting. While some research has been carried out on the relationship between CBD and various conditions, only a small amount of research is available when it comes to CBD absorption.

The new study, carried out by scientists at the University of Minnesota, looked at eight patients. They found that the absorption rate of CBD, when taken with fatty foods, was much higher than in a fasted state. From the results of the study, “On average Cmax was 14 times and AUC0‐∞ 4 times higher in the fed state. The 90% CI for the ratio of fed versus fast conditions for Cmax and AUC0‐∞ were 7.47‐31.86 and 3.42‐7.82, respectively. No sequence or period effect for Cmax and AUC0‐∞ was observed. No adverse events were reported.”

The study could prove vital for the future of medical cannabis and specifically CBD. The study also looked closely at CBD absorption rates when taken in capsule form. The researchers also found that CBD delivered via capsules absorbed better than liquid formations. CBD levels in the blood were measured during fasted states as well as when taken within 30 minutes of a fatty meal containing at least 800 calories total. The authors also noted that the increased absorption had no knock-on effects in the subjects in terms of cognitive or psychoactive results. 

Lead author of the study, Angela Birnbaum, said about the research, “For epilepsy patients, a goal is to maintain consistent blood concentrations of drugs. This study shows that CBD concentrations could vary significantly if patients take it differently, sometimes with or without food. Variations in blood concentrations could leave a patient more susceptible to seizures.”

The conclusions are also limited, specifically when it comes to the question of the actual fat content in a meal. As only eight patients were followed and tested, the conclusions of the study are a little underpowered and open to debate. However, other research exists to suggest that fat content in food affects absorption rates of compounds like CBD.

With that said, the conclusion of the study noted that “Administering CBD as a capsule rather than a liquid allows for more precise determination of pharmacokinetic parameters and is more representative of CBD swallowed products.” That fact alone is something exciting for those developing medical CBD products as much as it is for patients who take them.

For years, promises of growth had been more than enough to send marijuana stock valuations higher. However, things changed when Canada legalized recreational marijuana and opened its doors to adult-use weed sales on Oct. 17, 2018. No longer are promises sufficient to send cannabis stock market caps higher. Instead, Wall Street is looking to marijuana stock operating results and allowing sales growth to do a lot of the talking.

Considering that Canada is struggling with early stage supply issues, and most recreationally legal U.S. states are battling persistent black markets because of high excise tax rates, cannabis sales growth has mostly been disappointing this year. But according to Wall Street, four pot stocks are on track to grow their top lines by a minimum of 355% next year.

Auxly Cannabis Group: Sales growth of 3,056%

In terms of the fastest-growing cannabis stocks, there's Auxly Cannabis Group (OTC:CBWTF) and everyone else next year. Auxly, which has more than one dozen streaming deals in place, as well as a notable joint venture with Sunens, is expected to grow sales from an estimated 5.8 million Canadian dollars in 2019 to CA$184.3 million in sales.

You're probably wondering why Auxly Cannabis will only generate CA$5.8 million in full-year sales after Canada legalized recreational marijuana. For starters, Auxly's production is expected to come from its streaming partners and its Sunens joint venture. Most of these streaming partnerships aren't yet licensed and producing, while the Sunens joint venture won't begin production until the second quarter of next year. Most of its revenue in 2019 will likely come from contract revenue via wholly owned subsidiary KGK Sciences.

The other reason is that Auxly's management team has clearly stated its intention to hold back dried flower production with the intent of transforming this product into high-margin derivatives (e.g., vapes, edibles, and concentrates). Dried flower is a relatively low-margin products, so Auxly is forgoing low-margin sales now for higher-margin derivatives later, which will begin hitting dispensary shelves in mid-December.

The Green Organic Dutchman: 582%

Small-cap Canadian grower Green Organic Dutchman (OTC:TGODF) also has an opportunity to knock Wall Street's socks off next year. The consensus suggests that sales could surge from CA$39.1 million in 2019 to CA$227.9 million in 2020.

When fully operational, Green Organic Dutchman projects as a top-five producer in Canada, with 219,000 kilos of peak production. And like Auxly Cannabis, TGOD, as the company is known, plans to focus a lot of its attention on derivative products. It has facility space devoted to beverage and edible production, and signed a three-year extraction-services agreement not too long ago with Neptune Wellness Solutions that'll cover an aggregate of 230,000 kilos of cannabis and hemp biomass. With the company's flagship Valleyfield campus recently receiving its organic certification, and commercial production set to ramp up, it's easy to see how TGOD's sales could skyrocket next year.

Then again, it's also important to understand that TGOD was very late to the party in terms of getting its product to market, which is why its sales are set to soar so dramatically in 2020. Even with a focus on high-margin derivatives, it's still a toss-up as to whether or not this surge in sales will lead to the company's first-year of profitability.

HEXO: 452%

Keeping the Canadian grower theme going, Quebec-based HEXO (NYSE:HEXO) stands to see its sales grow from CA$59.7 million in 2019 to CA$329.5 million in 2020. However, it should be noted that management has repeatedly suggested that CA$400 million in sales is plausible for 2020, meaning Wall Street's consensus may need to creep higher, assuming countrywide supply issues work themselves out.

As is the theme so far, HEXO is also waiting for the official launch of derivative products. HEXO has more than 600,000 square feet of facility space set aside for processing and derivative production, as well as worked out a two-year extraction agreement with Valens GroWorks that'll result in 80,000 aggregate kilos of hemp and cannabis biomass being extracted for high-quality resins and distillates that can be used for derivatives. It's worth noting that HEXO also has a joint venture with Molson Coors Brewing -- known as Truss -- that'll see infused beverage sales begin by mid-December.

This is also a company that benefits from having what could be the most lucrative marijuana supply deal in history on its books. In April 2018, HEXO signed a five-year deal to supply cannabis to its home province of Quebec with an aggregate of 200,000 kilos of weed. Inclusive of its Newstrike Brands purchase, this should work out to about 30% of the company's output through 2023 already spoken for. Suffice to say, 2020 should be a big step forward for HEXO.

Flowr Corp.: 356%

The fourth and final stock offering incredible sales growth next year is small-cap British Columbian grower Flowr Corp. (OTC:FLWPF). According to Wall Street, Flowr should see sales catapult from CA$23 million in 2019 to CA$104.6 million next year.

Unlike Auxly, TGOD, and HEXO, Flowr hasn't been lumped in with major growers, at least in terms of production. Flowr's focus is on its flagship Kelowna facility, which is capable of at least 50,000 kilos of output when operating at peak capacity. But unlike most growers, Flowr is focused entirely on premium and ultra-premium dried flower and derivatives at Kelowna, meaning it should face little in the way of supply or pricing issues for its product. This Kelowna campus should see a healthy bump in production next year.

Furthermore, Flowr recently acquired the 80.2% interest in Holigen that it didn't already own. Holigen's outdoor Aljustrel grow farm in Portugal spans 7 million square feet and could yield 500,000 kilos of marijuana when fully operational. Even though outdoor-grown cannabis won't meet the exceptionally high-quality standards found at Kelowna, it'll be perfect to create derivative products for Europe's medical marijuana market.

Long story short :You'd struggle to find cannabis stocks with faster-growing top lines than these four next year.