To be blunt, marijuana stocks have not had a good year. Things certainly looked hopeful after more than a dozen pot stocks gained at least 70% during the first quarter, but pretty much all year-to-date cannabis gains have since gone up in smoke.

In Canada, persistent supply issues have kept legal pot from reaching dispensaries, with Health Canada slow to review and approve cultivation and sales licenses, and the country's most populous province, Ontario, allowing far too few retail stores. Meanwhile, a number of recreationally legal U.S. states have been taxing the daylights out of consumers. The end result throughout North America is a continued push back to the black market.

Yet despite these growing pains, there's one marijuana stock that stands out head-and-shoulders above its peers. If you're looking a true top performer in the cannabis space, considering dialing up vertically integrated multistate operator Trulieve Cannabis (OTC: TCNNF) as the top marijuana stock to buy in December.

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A brief synopsis of why Trulieve Cannabis' stock hasn't gone through the roof

However, before I begin digging into the many reasons Trulieve can potentially deliver green for your portfolio, I find it beneficial to examine the risks that could thwart this thesis. And make no mistake about it -- every single publicly traded company has investment risks, including Trulieve Cannabis.

The obvious elephant in the room for Trulieve, which operates cultivation farms, processing sites, and retail stores in the U.S., is that marijuana remains an illicit substance as a result of its Schedule I classification. Even with the federal government allowing states to legalize and regulate their own marijuana industries, this scheduling can lead to a host of problems, such as limited access to non-dilutive forms of financing, including loans and lines of credit. Cannabis businesses can also be exposed to Section 280E of the U.S. tax code, leading to exceptionally high effective corporate income tax rates.

Another key concern for Trulieve would be the growing presence of competitors in its home market of Florida. Even with a relatively small number of cannabis business licenses being issued in the state, MedMen Enterprises has plans to open up to 30 stores in the Sunshine State, with peers Liberty Health Sciences and Curaleaf Holdings already having 19 and 26 respective open retail locations in Florida. MedMen and Curaleaf, in particular, have done a solid job with branding, which has the potential to eat into Trulieve's margins.

Along those same lines, there's the possibility that Florida could choose to legalize recreational marijuana in an upcoming election (right now only medical weed is legal). If residents vote in favor of adult-use pot, Trulieve will be forced to establish its brand all over again, given the penchant for recreational sales to cannibalize medical marijuana sales over time. However, with so many new competitors in the state, this wouldn't be easy.

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Here's why Trulieve is the pot stock you should buy in December

Now that we've covered some of Trulieve Cannabis' biggest challenges, let's go over the many reasons it's the marijuana stock to buy this month.

The first reason to consider adding Trulieve to your portfolio is its truly dominating position in Florida. The company is about to open its 40th store in the state, which is far more than any of its peers. Even though Trulieve has a presence in a few other states, it's primarily chosen to focus its efforts on the Florida market. In doing so, it's successfully built up its brand and kept its operating expenses relatively low by confining its efforts in a single state.

This leads to the next point: the opportunity Florida presents. According to the State of the Legal Cannabis Markets report, released earlier this year by Arcview Market Research and BDS Analytics, Florida is expected to chime in with $1.9 billion in annual sales by 2024. This would make Florida the state with the third-highest annual cannabis sales, and the expectation is this'll be done entirely with medical pot. This positions Trulieve well to continue capitalizing on its superior market share within the state.

It's worth noting that Trulieve does have expansion opportunities beyond Florida and plans to ease into those opportunities in the quarters that lie ahead. The company has a presence in California -- the largest weed market in the world by annual sales -- along with Massachusetts and Connecticut. Massachusetts is expected to be yielding at least $1 billion in annual weed sales by 2024.

Image source: Getty Images.

Now, the meat and potatoes of this investment thesis is that Trulieve Cannabis is, arguably, the most profitable pot stock on the planet, if you strip out one-time benefits an fair-value adjustments. During the recently completed third quarter, the company generated $70.7 million in sales, a 150% year-on-year improvement, with $44 million in gross profit, before fair-value adjustments. Because Trulieve has focused most of its effort on Florida, its operating expenses remained in check and rose to only $20.6 million. Thus, on an operating basis and without the aid of any one-time benefits or adjustments, Trulieve delivered a $23.4 million operating profit in Q3.

Inclusive of fair-value adjustments, the company logged $89.5 million in income from operations, leading to a robust $0.55 quarterly profit. Even though fair-value adjustments are unpredictable, these operating profits are completely sustainable at this point.

Lastly, I think it's important to recognize that Trulieve Cannabis isn't burying its shareholders in new share issuances to raise capital. The company recently completed a sale-leaseback agreement with Innovative Industrial Properties that helped to raise capital and also secured $61 million from a debenture offering. In other words, whereas cash and financing remain a concern for many of its peers, Trulieve has plenty of capital to execute on its long-term strategy.

Given the company's aggressive growth rate, 17 times next year's earnings per share is a pretty cheap price to pay for a best-of-breed U.S. marijuana stock.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.