Cannabis stocks are set to hit some major milestones in 2024. A recent Water Tower Research report points to key inflection points that could push top cannabis stocks higher next year. First, major government agencies are seriously considering rescheduling cannabis, with an initial decision set for December 18th. Rescheduling reduces the cash issues cannabis stocks face and opens a range of tax savings that will improve profit margin tremendously.

Legalization is also gaining ground nationally, with Florida and Pennsylvania set to bring recreational use out of legal dark zones. We’re already seeing a snowball effect as companies legalize cannabis, and continued headway on that front bodes well for cannabis stocks.

In Canada, cannabis stocks are also increasingly moving onto major stock exchanges. Since most are stuck within the over-the-counter markets, they’re less visible. They’re also less likely to generate massive institutional investment. But, as companies like Verano Holding (OTCMKTS:VRNOF) jump into the big leagues, they can raise cash and expand operations more easily.

Tilray Brands (TLRY)

Tilray Brands (NASDAQ:TLRY) is set to gain ground alongside all other popular cannabis stocks with a unique side benefit – The company also produces craft beer. A few months ago, Tilray announced that it was buying eight brands from beer giant Anheuser-Busch (NYSE:BUD). The move cements Tilray within the craft beer market, which is rising just as quickly as cannabis’ popularity.

The move, of course, lets Tilray diversify revenue streams and generate funding for cannabis expansion. Critically, though, Tilray didn’t just buy brand names. The company also bought distribution rights, marketing teams and more. Absorbing those operational elements will let Tilray rapidly gain ground as legalization spreads. As CEO Irwin Simon said:

“Upon legalization (in the U.S.) one day, we will infuse these drinks with THC, with CBD, but we’ll have the distribution and we’ll have the brands when and if legalization does happen.”

Market penetration is one of the hardest parts of a competitive industry like cannabis. By leveraging its new properties, Tilray gained access to ready-made markets.

Green Thumb Industries (GTBIF)

Green Thumb Industries (OTCMKTS:GTBIF) is one of the few pure-play cannabis stocks with consistent cash flow. This month, the company posted a 9% quarterly revenue growth. At the same time, net income hit $11 million for the quarter and $154 million in total cash flow for the year. Profitability isn’t easy for cannabis stocks, and Green Thumb’s financial strength sets it apart to dominate the industry in 2024.

Financial standing isn’t a matter of luck, though. Many of the smaller cannabis companies tend to think of products first and financials second. But, since products are usually easy to develop, they fall prey to market forces they’re unprepared for. But Green Thumb’s management keeps its thumb on economic pulses and market expectations. A statement from CEO Anthony Georgiadis summed up its focus well:

“Our obsessive focus on operational efficiency, working capital management and cash flow generation has allowed us to continue to generate strong revenue and profitability performance despite continued macro-economic and pricing headwinds in some of our markets.”

Verano Holdings Corp (VRNOF)

I mentioned that Verano Holdings pivoted to a major exchange in Canada, but that isn’t the only bullish tailwind pushing this cannabis stock. Verano, founded in 2021, is much younger than many cannabis stocks. But its recent strength and popularity point to big things ahead.

Verano’s biggest market today is Florida. So, not only does Verano benefit from its new listing status, but it stands to gain if (or when) Florida fully legalizes adult cannabis use. Analysts expect that Florida’s current cannabis industry could triple if legalization happens in 2024. While a handful of operators would win, Verano’s current strength in Florida markets could catalyze explosive growth.

Unfortunately, Verano is a bit of a long-term play. The initiative must first meet legal requirements and won’t be on the ballot until next November. Still, the stock’s price is right. If you’re willing to wait, Verano could be 2024’s biggest cannabis stock.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.