Although the cannabis market globally may have missed investors’ expectations, with stocks not living up to their hype, I believe that emerging cannabis markets hold much promise. 

Many countries and U.S. states have recently legalized or decriminalized cannabis for medical or adult recreational use. This has opened up new consumer bases and allowed new businesses to enter the space. Compared to the more mature and saturated North American market, these emerging markets are still in the early stages of development.

I therefore believe that certain geographical regions will be more accretive for investors than others, with these emerging cannabis markets ultimately surging ahead. These markets don’t have the same amount of red tape to get through, and many already have established momentum in decriminalization or even being outright legalized altogether.

So here are three emerging cannabis markets for investors to explore.

Thailand

Recently, Thailand became the first Asian country to decriminalize cannabis, primarily for medical use. This has opened up new avenues for medical tourism. Thai entrepreneurs are now exploring ways to integrate cannabis into traditional Thai medical practices, wellness retreats and spa treatments.

It should be noted that although it is decriminalized for medical use, the new conservative Thai coalition government is moving ahead to ban it for recreational use. However, given Thailand’s key destination for tourism and wellness in general, I expect that it will remain one of those key emerging cannabis markets for U.S. investors to keep their eyes on.

Investors could get exposure to the Thailand market and others on this list through an ETF such as the Amplify Alternative Harvest ETF (NYSEARCA:MJ). This ETF focuses on the global cannabis industry, which implies exposure to Southeast Asia. It has an expense ratio of 0.78%, along with a dividend yield of 4.56%.

Mexico 

Mexico has been moving towards legalizing cannabis fully for a few years now. If legislation is passed, it could become one of the largest legal markets due to its population and tourism industry.

The potential economic impact of legalization is substantial. Estimates suggest that the legal cannabis market could generate billions in tax revenue and create thousands of new jobs.

However, as the legislative process continues, the specifics of the regulations remain under discussion, with debates ongoing about public consumption rules, the scope of commercial licenses, and more.

For U.S. investors to take advantage of this shift in Mexico’s stance on cannabis and other regions, one can invest in ETFs such as the Horizons Marijuana Life Sciences Index ETF (OTCMKTS:HMLSF).

This ETF tracks the North American Marijuana Index, which is aimed to create a comprehensive basket of North American equities that have significant exposure to the global cannabis market.

Germany

Germany became the largest EU nation to legalize cannabis for recreational use this month. Adults over 18 can now carry up to 25 grams of dried cannabis and grow up to three plants at home.

The market value for medical cannabis alone reached over €73 million in 2018, and with the legalization of recreational use, the broader cannabis market’s potential is even more promising​.

The German market is projected to grow significantly, with estimates suggesting it could be worth $4.6 billion annually.  The legalization includes the establishment of cannabis clubs where up to €2.4 million turnover per club could be seen.

These factors then position Germany as one of those emerging cannabis markets for investors to keep their eyes on. Although a Germany-specific ETF has not yet been launched to cater to this regional demand, both the HMLSF and MJ ETFs give implied exposure through their international coverage, meaning that an investment in both could help lock in the upside from the cannabis market in Germany.

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