[Editor’s note: This story was previously published in March 2019. It has since been updated and republished.]

Traffic stats don’t lie: among investment categories, few have the draw of legal marijuana. And within this broad segment, companies specializing in cannabidiol, or CBD, have generated significant buzz. But what exactly is this three-letter acronym, and how can CBD stocks boost your returns?

Let’s start with basic definitions. Cannabidiol represents one of several cannabinoids, or chemical compounds found in the cannabis sativa plant. But unlike the most famous cannabinoid tetrahydrocannabinol (THC), CBD does not trigger any psychoactive effect. In other words, users can enjoy this compound’s benefits without getting high.

This opens up profound opportunities for marijuana stocks that have exposure to CBD. First, since this compound inherently lends itself to medicinal use, it tends to be treated favorably by legislation. Most states allow CBD use for therapeutic purposes. Given political and public sentiment, it’s not inconceivable that all states will eventually green-light cannabidiol.

Second, CBD has the potential to help solve a huge societal problem. Turn on the news, and you’ll eventually find stories about the raging opioid crisis. What is less reported is that pharmaceutical companies contributed to the problem with highly addictive painkillers. Since CBD is not physically addictive, it could be a viable replacement for many addictive opioids.

Finally, the U.S. may be the leader of the free world, but it stymies itself with antiquated laws. Our neighbors to the north became the first G7 nation to legalize recreational weed, while we still classify cannabis as a Schedule I narcotic. Still, our laws will eventually reach the 21st century. When they do, marijuana stocks of all stripes should realize their full potential.

In the meantime, here are four CBD stocks to consider adding to your portfolio:

Tilray (TLRY)

Source: ShutterstockWhen it comes to medicinal marijuana, few cannabis stocks have generated as much positive traction as Tilray(NASDAQ:TLRY). Last fall, TLRY stock soared to the stratosphere as the underlying firm received approval from the Drug Enforcement Administration to import weed for medical research.

While shares have since come down significantly from those highs, Tilray remains a powerful name among CBD stocks. Recently, management signaled that it will aggressively compete in the cannabidiol sector with its acquisition of Manitoba Harvest. Manitoba specializes in CBD-infused food and health products, providing Tilray a key advantage in the North American market.

From a technical perspective, speculators may want to dive into currently discounted levels. After the crazy phase in marijuana stocks dried up, several names fell under the radar. One of those is TLRY stock, which has mostly moved sideways this year.

But with CBD gaining momentum stateside, who knows how long this discount will last?

Aurora Cannabis (ACB)

Source: Shutterstock

Much of the enthusiasm towards Edmonton-based CBD (and THC) firm Aurora Cannabis(NYSE:ACB) came off the back of an analyst upgrade. Cowen Equity Research initiated coverage of ACB stock, rating it as “outperform,” and giving it a rich price-target premium.

But it’s also interesting to note why Cowen is so optimistic. Analysts there view favorable international opinion towards marijuana as being beneficial to ACB stock over the long term. It’s not an unreasonable thesis. Among CBD stocks, Aurora has made a significant dent in the global medical-marijuana field.

Plus, the company has a massive market down south. While we’re fiercely divided politically, marijuana legalization is something Americans agree on more than most things.

Hexo (HEXO)

Source: ShutterstockInvariably, marijuana stocks are incredibly risky. While legalization initiatives have opened opportunities, this is a double-edged sword as competitors swarm into the arena. What you’re left with are several companies like Hexo(AMEX:HEXO), which suffer from severely-challenged financials.

But despite the risks, cannabis investors should strongly consider CBD stocks like HEXO. Since cannabidiol doesn’t produce any psychoactive or addictive responses, it facilitates surprisingly broad synergies. A prime example is the budding relationship with marijuana firms and beverage-makers.

Last summer, Hexo entered a joint venture with Molson Coors Brewing(NYSE:TAP) to produce CBD-infused drinks. Naturally, HEXO stock jumped off the news before giving up those gains late last year.

However, shares are making a strong comeback this year, jumping to a 100% lead. While it’s incredibly volatile, further positive developments could easily lift HEXO stock to its prior highs.

BlissCo Cannabis (HSTRF)

Source: ShutterstockI always warn folks that cannabis and CBD stocks are risky because that’s God’s honest truth. But BlissCo Cannabis (OTCMKTS:HSTRF) is an entirely different ballgame. HSTRF stock is so speculative that it makes other companies in this sector look stable.

We can start with the fact that shares currently sell for 29 cents a pop. Unlike some of the established names, the historical trend for HSTRF stock is decidedly negative. Finally, I don’t think I need to say this but BlissCo has severe fiscal challenges.

So why am I mentioning this company? Simple…upside potential. Partnering with both medical professionals and alternative therapists, BlissCo is a known commodity in Canada’s medicinal-cannabis industry.

Year-to-date, shares are up nearly 39%. As BlissCo remains undervalued relative to its historical averages, there’s probably substantial room for growth.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.