Cannabis stocks have been crushed this year due to the lack of progress on the federal legalization of marijuana and macro challenges. However, President Joe Biden’s historic decisions to pardon people convicted of “simple possession of marijuana” and to review the classification of marijuana as a Schedule 1 drug have revived investors’ attention in the cannabis sector.

The classification of marijuana as a Schedule 1 drug, the same category that includes dangerous substances like heroin and LSD, has hampered the growth prospects of cannabis companies. The change in marijuana’s classification could trigger favorable reforms. This could include improved access to banking and lower tax burdens for cannabis companies.

Ultimately, the federal legalization of marijuana is expected to attract institutional investors and additional retail investors to the cannabis space. While the U.S. government has taken a step in the right direction, uncertainty regarding federal legalization remains. That’s true even as more and more states have legalized cannabis recently.

Bearing this backdrop in mind, I used TipRanks’ Stock Comparison Tool to place the following cannabis stocks against each other and select the stock that could offer the most attractive upside potential as per Wall Street pros.

Cresco Labs (CRLBF)

With its presence in 10 U.S. states, Cresco Labs (OTCMKTS:CRLBF) is one of the leading multi-state operators. Despite pricing pressure in key markets, the company’s second-quarter revenue grew 4% year-over-year (YOY) to $218 million. Q2 adjusted gross margin improved nearly 200 basis points to 53%. Meanwhile, the adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin expanded 150 basis points to 23%.

Cresco is focused on maintaining its gross margin above 50% by driving improvements through automation and other productivity measures.

The company currently has 21 production facilities and 54 dispensaries. It expects its pending acquisition of Columbia Care (OTCMKTS:CCHWF) to more than double its retail footprint. The deal is expected to close around the end of this year.

The company currently doesn’t have a presence in the lucrative New Jersey market, which recently legalized cannabis. The Columbia Care acquisition will not only give Cresco exposure to the rapidly growing New Jersey market but will also strengthen its position in other states.

With New York, Pennsylvania, Ohio, Virginia, Florida and Maryland transitioning to recreational cannabis over the next three years, Cresco is confident that its merger with Columbia Care will help it win leading share positions in several markets.

Wall Street currently has a “strong buy” consensus rating for Cresco Labs based on seven “buys” and two “holds.” Given the steep pullback in the stock this year, the average Cresco price target of $8.06 suggests 151.9% upside potential from current levels.

Curaleaf Holdings (CURLF)

Massachusetts-based Curaleaf (OTCMKTS:CURLF) is a leading cannabis multi-state operator with 144 dispensaries.  It has a footprint in 21 states and is targeting growth in highly populated states, including Arizona, Florida, Illinois, Massachusetts, New Jersey, New York and Pennsylvania. Curaleaf also expanded into Europe through its 2021 acquisition of EMMAC Life Sciences Group.

Curaleaf’s second-quarter revenue increased 8% YOY to $337.6 million, as higher retail revenue offset lower wholesale business. However, its Q2 net loss increased to 4 cents per share from 1 cent per share in the prior-year quarter due to increased operating expenses and growth investments. Curaleaf expects its full-year revenue to come in at the lower-end of its guidance range of $1.4 billion to $1.5 billion.

Looking ahead, Curaleaf continues to make strategic acquisitions to ensure future growth. Recent deals include the purchase of a 55% stake in Germany’s Four 20 Pharma. Furthermore, the acquisition of Tryke Companies will strengthen the company’s presence in Arizona, Nevada and Utah.

Earlier this month, Benchmark analyst Mike Hickey trimmed his price target for Curaleaf to $7 from $8 and reiterated a “buy” rating.

Hickey lowered his fiscal third-quarter estimates to reflect “a stalled New Jersey store rollout,” the impact of Hurricane Ian, the divestiture of a dispensary in Arkansas and persistent challenges in California. Further, the analyst expects inflation to impact Curaleaf’s growth this year and next year as well.

Overall, Wall Street has a “strong buy” consensus rating on Curaleaf stock based on 10 “buys” and one “hold” rating. At $8.82, the average Curaleaf price target implies nearly 68% upside potential.

Green Thumb Industries (GTBIF)

Among cannabis stocks, Green Thumb Industries (OTCMKTS:GTBIF) is a strong choice. The leading cannabis consumer packaged goods company operates the RISE retail stores. Despite a tough business landscape, the company’s Q2 revenue grew 14.6% YOY to $254.3 million.

The beginning of recreational cannabis sales in New Jersey, strong retail sales in Illinois and additional retail locations compared to the prior-year fueled Q2 revenue growth. Earnings per share (EPS) was flat YOY at 10 cents but was ahead of analysts’ expectations.

Unlike several other cannabis stocks that are struggling to thrive, Green Thumb’s strong execution has helped it deliver GAAP profit for eight consecutive quarters.

With operations across 15 U.S. states, Green Thumb appears to be on track to cross the $1 billion revenue mark this year. Additionally, it could expand further in the future.

However, investors should keep an eye on any further updates with regard to the resignation of three of the four independent directors on the company’s board. The company specified that the resignations were not related to its business performance or financial statements, but “rather over a disagreement as to the Company’s policies and practices related to personal misconduct.”

As of now, Green Thumb scores the Street’s “strong buy” consensus rating with 11 unanimous “buys.” The average GTBIF price target of $23.18 implies 120.6% upside potential from current levels.

To conclude, Wall Street is bullish on these cannabis stocks based on their footprints in key markets and the opportunity to expand further. If we consider only the upside potential from current levels, then Cresco Labs stock seems to be the best pick. The company’s Columbia Care acquisition is expected to bolster its position in the cannabis market and drive further share gains in key states.

On the date of publication, Sirisha Bhogaraju 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.