The White House announced on Oct. 6 that it was pardoning many convicted of simple marijuana possession, creating a good deal of hot pot stocks to buy.

On the day of the announcement, the AdvisorShares Pure US Cannabis ETF (NYSE:YOLO) gained 34%. The second-largest U.S.-listed ETF, the ETFMG Alternative Harvest ETF (NYSE:MJ), gained 20%.

Both have returned to where they were trading before President Biden’s announcement. Several reasons exist for the reversal.

First, investors realize that the line between the federal government pardoning those convicted of simple marijuana possession and legalizing cannabis at the federal level is not straight. Secondly, we are experiencing one of the most significant corrections in recent memory.

The S&P 500 is down 23.87% year-to-date. That’s its third-worst performance since 1970. Only 2008 (-37.0%) and 1974 (-26.47%) were worse, but we’ve got time. There are still more than two months left in the year.

The final reason is that investors have lost interest in pot stocks. So many trends have come to be — electric vehicles, artificial intelligence, cloud computing, etc. — since Colorado and Washington legalized the recreational use of cannabis in 2012, and the Canadian government did the same in 2018. 

However, there are still pot stocks worth owning. Here are three of them.  

Green Thumb Industries (GTBIF)

A September article from the Green Market Report shined a light squarely on Green Thumb Industries (OTCMKTS:GTBIF), the Chicago-based manufacturer and distributor of branded cannabis products. 

The article discussed how 10 multi-state operators (MSOs) owed more than $500 million in federal tax to the Internal Revenue Service (IRS). Green Thumb, which has 17 manufacturing facilities, 77 retail locations, and operations across 15 U.S. markets, was the only one that would have more than 10 months of cash left on its balance sheet after satisfying its IRS obligations for federal taxes. 

With fears of a global recession rising daily, a solid balance sheet is vital to making it through any economic downturn. In past articles about cannabis, I’ve leaned toward Trulieve Cannabis (OTCMKTS:TCNNF) regarding owning U.S. MSOs.  Green Thumb’s revenues are growing sequentially (4.8% higher in Q2 2022 compared to Q1 2022) while it delivered eight consecutive quarters of GAAP (you read that right) net income. 

That’s how you get more than 10 months of operating cash on your balance sheet.

Innovative Industrial Properties (IIPR)

Another one of the top pot stocks to buy is Innovative Industrial Properties (NYSE:IIPR) because it is the cannabis industry’s largest landlord. That means something in an industry where it’s challenging to get financing to own your real estate.  Innovative provides capital to its cannabis-producing tenants and provides them with long-term leases of up to 20 years. While that’s a double-edged sword — doubling down on some of its tenants means ratcheting up the risk in an industry that’s already risk-forward — it’s generating two revenue streams instead of one. 

In this respect, it’s a true partner with its tenants rather than a rent check collector. 

In early September, the REIT (real estate investment trust) paid $207 per square foot for 104,000 square feet. The Massachusetts facility is fully operational and leased to Curaleaf Holdings (OTCMKTS:CURLF), another MSOS that I believe is going places in the battle for U.S. cannabis supremacy. Curaleaf has approximately 578,000 square feet of leased space with IIPR. 

There is more risk in owning IIPR than your typical REIT, but as every year passes, Innovative becomes better at owning and operating cannabis-focused real estate.

SNDL Inc. (SNDL)

As I said in my July article discussing the 7 Best Marijuana Stocks to Buy Now, SNDL Inc. (NASDAQ:SNDL) is Canada’s most intriguing cannabis company. That’s because it not only manufactures its own cannabis, but also invests in other cannabis companies and related businesses while retailing cannabis and alcohol across Canada. It’s another one of the top pot stocks to buy to consider.

On the investment front, SNDL announced two bids to acquire cannabis businesses in Aug.  

The larger of the two sees it acquire The Valens Company (NASDAQ:VLNS) for 138 million Canadian dollars ($100.49 million) in SNDL stock. Valens brings high-quality extraction, processing, and manufacturing capabilities to the table. Together, SNDL could become A leader in the Canadian cannabis space.

The other bid was to buy virtually all of the assets of Superette Inc. out of Canadian creditor protection. SNDL’s bid is a stalking horse bid, which means it will act as the floor price for any other potential offers to buy Superette’s assets. Key to the purchase is six retail locations in Toronto and Ottawa.

If you’re not comfortable owning companies with lots of moving pieces, SNDL might not be for you. However, if you follow Berkshire Hathaway (NYSE:BRK-A), you’ll be very comfortable with the hybrid holding company business model, where it is both an operator and investor at the same time. I continue to like where CEO Zach George is taking SNDL.

On the date of publication, Will Ashworth 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.