For all the cannabis sector’s promise and growth potential, not much has stirred it market-wise apart from a, shall we say, blunt drop. But, today, I have three bullish cannabis stock predictions for the upcoming year.

Currently, the cannabis market is regulated by states, creating a patchwork of regulations. Cannabis investors have long held out hope for federal legalization. The Marijuana Opportunity Reinvestment and Expungement Act, which seeks to decriminalize cannabis at the federal level, passed the House of Representatives in late 2020 but has failed to gain traction in the Senate.

Some investors are waiting for this or similar legislation to pass before going near cannabis stocks. Yet, it’s possible that, by doing so, they will miss out on some big initial gains in the run-up to and immediately following legalization. Because when it happens, stocks across the sector are going to explode higher.

For those looking to maximize their risk-reward in this speculative sector, I have three cannabis stock predictions you might like. Each of these names is worth considering for your speculative capital, with analysts forecasting double- and even triple-digit returns over the next 12 months, according to TipRanks.

Aurora Cannabis (ACB)

Average Analyst Price Target: $1.41 (26% potential upside)

Given the lack of federal legalization in the United States, cannabis stock investors are generally focused on U.S.-based multi-state operators or companies operating in Canada, which legalized cannabis in 2018. Aurora Cannabis (NASDAQ:ACB) is one of Canada’s top cannabis companies.

Aurora has seen some impressive growth in the Canadian market thanks to the company’s core brands. As The Motley Fool’s Alex Carchidi writes, “In the last five years, its quarterly revenue climbed by 327.2%, reaching $39.3 million, driven by its penetration of the Canadian recreational and medicinal markets.”

To that end, Carchidi notes that Aurora has a leading position in Canada’s medicinal cannabis market, as well as Poland’s, and is expanding its presence in Germany and Australia. On the recreational side, Aurora offers a wide range of products that should help with its brand-building and customer retention.

Over the long term, I predict Aurora’s strong portfolio of brands will help insulate the company from the competition and drive customer loyalty. That makes this a cannabis stock that’s worth putting in your pipe and smoking.

MariMed (MRMD)

Average Analyst Price Target: $0.91 (60% potential upside)

Like many cannabis stocks, shares of multi-state cannabis operator MariMed (OTC:MRMD) have been hit hard this year. Trading at less than $1 per share, MariMed is deep in penny-stock territory. Yet, there’s a lot to like about its past and potential growth.

MariMed is an operator of “seed-to-sale state-licensed cannabis facilities” with grow operations in four states, dispensaries in three states, and brand distribution in six states plus Puerto Rico. The company recently acquired its fifth dispensary in Illinois, with a goal of operating 10 in the state. MariMed plans to enter the Ohio and Missouri markets in the near future, and is eyeing the New Jersey and New York markets as well.

For the first six months of the year, MariMed saw revenue increase 12.3% year over year to $64.3 million, but profits were squeezed due to rising costs. While management lowered its full-year revenue forecast, it still expects growth of 13.2% at the midpoint of its guidance.

I predict that, thanks to its aggressive targeting of new markets, investors will find MariMed has more upside potential than many of its peers, albeit with a higher risk profile.

Columbia Care (CCHWF)

Average Analyst Price Target: $3.61 (134% potential upside)

Last, but certainly not least, we have Columbia Care (OTC:CCHWF), one of the largest cannabis players in the U.S. Of today’s picks, this is one with the biggest potential upside, according to analysts.

One of the big drivers of this bullishness is likely the company’s $2 billion merger with Cresco Labs (OTC:CRLBF), which is expected to close by year end. The combined company is expected to generate pro-forma revenue of more than $100 million in eight states by next year.

As Columbia Care diversifies and improves its scale with the merger, I predict the share price will recover from its long-term downtrend and reward patient investors.

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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.