The ‘red wave’ didn’t happen on Tuesday — but a green one is appearing. These two states just voted to legalize smoking weed, joining 19 other states and DC. Should investors pounce?

With midterm election results continuing to trickle out, every headline seems to be about how the “red wave” didn’t happen. Here’s something that did materialize and could be an opportunity for investors — more cannabis legalization.

In this election, legalizing marijuana was on the ballot in five states. Voters in Maryland and Missouri voted to approve the legalization of recreational cannabis, while the proposal did not pass in North Dakota, South Dakota and Arkansas.

That means Maryland and Missouri will be joining 19 other states and the District of Columbia that offer legal recreational cannabis to their residents.

As the U.S. continues to move towards legalization, cannabis companies stand to benefit.

Let’s take a look at three marijuana stocks ready to capitalize on this trend. They are listed on stock exchanges in Canada but trade over the counter in the U.S. — analysts also see major upside in this trio.

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Trulieve Cannabis Corp (TCNNF)

Trulieve Cannabis entered the cannabis industry by winning the first medical marijuana application in Florida in 2015. Today, it has 100 stores in the Sunshine State, and around 150 operated and affiliated dispensaries nationwide.

The company claims that it has leading market positions not just in Florida, but also in Arizona and Pennsylvania.

Trulieve’s financials have grown tremendously, and even the COVID-19 pandemic couldn’t stop the momentum. In 2020, revenue rose 106% from the 2019 level to $521.5 million.

In 2021, revenue surged another 80% to $938.4 million.

According to the latest earnings report, Trulieve earned $320.3 million of revenue in Q2 of 2022, up 49% year over year.

The stock, however, has plunged over 52% year to date.

Canaccord analyst Derek Dley sees a rebound on the horizon. The analyst has a ‘buy’ rating on Trulieve and a price target of C$57 on its Canada-listed shares — implying a potential upside of 273%.

Green Thumb Industries (GTBIF)

Green Thumb is a vertically integrated cannabis company headquartered in Chicago. It has 17 cultivation and manufacturing facilities, six consumer product brands, 77 open retail locations, and operations in 15 U.S. markets.

Just like Trulieve, Green Thumb stock hasn’t been a hot commodity: shares are down more than 30% in 2022.

Business, however, is still on the rise.

Revenue totaled $261 million for the quarter that ended in September, up 12% year over year and 3% sequentially.

But the best part has been the bottom line. Green Thumb earned a profit of $10 for the quarter, marking its ninth consecutive quarter of positive net income.

Stifel analyst Andrew Partheniou has a ‘buy’ rating on Green Thumb and a price target of C$31 on its Canada-listed shares. Since these shares trade at C$17.25 right now, the price target represents a potential upside of 80%.

Curaleaf Holdings (CURLF)

With a market cap of around $4.9 billion CAD, Curaleaf is a bigger company than both Trulieve and Green Thumb.

It has a huge presence in the U.S. cannabis industry, with 26 cultivation sites, approximately 4.4 million square feet of cultivation capacity, 136 retail locations and more than 2,150 wholesale partner accounts.

During the third quarter, revenue grew 7% year over year to $340 million.

Notably, Curaleaf has a strong focus on research and development: the company is currently on pace to increase new product revenue 75% year over year.

Still, this pot heavyweight is not immune to the industry-wide sell-off as shares are down over 30% year to date.

Alliance Global Partners analyst Aaron Grey has a ‘buy’ rating on Curaleaf and a price target of C$12 on its Canada-listed shares — roughly 52% above where they sit today.