After a very rough year in 2019 for most marijuana stocks, 2020 has started off on a better note overall. While some stocks continue to languish, others have bolted out of the gate.

Three high-flying marijuana stocks in January that especially stood out are Namaste Technologies (OTC:NXTTF), KushCo Holdings (OTC:KSHB), and Innovative Industrial Properties (NYSE:IIPR). Here’s why these stocks performed so well — and whether or not they’re smart picks to buy now.

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Namaste Technologies

Namaste shares skyrocketed 91% in January. The big news for this provider of an online platform for cannabis products and accessories was its announcement that Health Canada had awarded a license to Alberta-based Choklat for processing cannabis-infused chocolate bars, drink mixes, and sugar.

This license is great news for Namaste because it owns 49% of Choklat. Namaste CEO Meni Morim said: “We believe there is pent-up demand for cannabis-infused edible products on a national scale. Choklat is one of the first food processors in Canada to receive its processing license from Health Canada.” Morim added that Choklat’s first products will hit the market in March.

The news for Namaste hasn’t been very good for quite awhile. Its revenue deteriorated in 2019. Former CEO Sean Dollinger was booted out in the wake of a scandal over inside deal-making. But Morim has taken firm steps to right the ship since taking the helm last year. 

KushCo Holdings

KuschCo stock soared 23% in the first month of 2020. The ancillary cannabis products and services company announced its fiscal 2020 first-quarter results on Jan. 8.

While revenue in Q1 soared 38% year over year to $35 million, the company’s bottom line went in the wrong direction with a net loss of $12.5 million compared with $8.6 million in the prior-year period. But investors seemed to like that the market dynamics for KushCo are improving.

A significant portion of revenue comes from vaping products. The vaping health scares that made headlines in 2019 took a toll on the company’s sales. But CEO Nick Kovacevich said earlier this month that there have been several positive developments, including a decline in new reports of vaping-related illness, and states holding off on implementing bans on vaping products. He predicted that KushCo’s customers would gradually resume their purchasing patterns in the second half of the company’s fiscal year.

Innovative Industrial Properties

Shares of Innovative Industrial Properties (IIP) jumped 18% in January. Many stocks fall on the news of a public offering, but not IIP. The cannabis-focused real estate investment trust (REIT) announced an offering of nearly 3 million shares, and its stock continued to climb.

Probably the main reason investors cheered rather than jeered IIP’s stock offering is that they’re confident that the company will put the $250 million that it’s raising to good use. IIP already has 48 properties in 15 states, with 98.9% of the total square footage of these properties leased to cannabis operators. 

The company’s business model appears to be working quite well. Its net rental revenue more than tripled year over year in the third quarter of 2019. Unlike most marijuana stocks, IIP is consistently profitable, with its net income soaring 314% year over year in Q3.

Are they buys?

Marijuana stocks tend to be really volatile. Big gains like the ones generated by Namaste, KushCo, and Innovative Industrial Properties in January are often followed by big downswings. 

I’m cautiously optimistic about the prospects for Namaste and KushCo. Both companies appear to be getting back on track after major headwinds last year. But I wouldn’t call either of these stocks buys just yet.

On the other hand, I continue to view Innovative Industrial Properties as one of the best marijuana stocks on the market right now. The company has a clear runway for growth. Its management continues to execute well. And IIP’s dividend yield of 4.25% is very attractive. Every month won’t be as good for IIP as January was, but I think that this stock should be a winner over the long run.