The legalization of marijuana in the United States has lit a spark with investors who are turning their focus to the small — but rapidly expanding — medical marijuana industry.

“Everybody is running toward this as the next entrepreneurial wave — the green rush,” Robert Frichtel, CEO of Advanced Cannabis Solutions, told Bloomberg Businessweek in a January interview.

Considering the number of states legalizing the sale of marijuana to people 21 years and over and those that permit the use of marijuana for medical purposes, Troy Dayton, CEO of ArcView, an investment firm focused on the burgeoning marijuana industry, sees the market for legal marijuana growing to $2.34 billion in 2014.

A long-term play?

Though investing in marijuana sounds like a lucrative opportunity, market watchers are calling it a long-term investment.

That is not to say that making money right now is an impossibility. A recent Globe and Mail article points to several stocks, including Hemp Inc., Advanced Cannabis Solutions, Medical Marijuana Inc. and GW Pharmaceuticals, all of which have gained on the S&P/TSX Composite Index in the wake of the “green rush.”

However, as with any new opportunity, there is always a fair amount of risk. For the marijuana industry, those risks and challenges include the overarching decriminalization of marijuana at the federal level in the United States, among other regulatory threats.

But looking beyond the bureaucratic red tape still left to be cut, it should be noted that the industry is still in its early stages, meaning that — like any other investment opportunity — penny stocks are a risk. The Financial Regulatory Authority even issued a warning in January for investors to be on the lookout for marijuana stock scams.

Overall, however, it seems that despite the any concerns market watchers might have, the cannabis industry isn’t going to go up in smoke any time soon.

“Business is very good,” Robert Frichtel, told The Globe and Mail. “We are in the early stages of what’s going to be a very large industry over time.”

Over time is what investors should be considering, it seems, when looking at marijuana investments. Alan Brochstein, a financial analyst in Houston who runs 420investor.com, told the Globe, “[e]verybody wants to get rich real quick, and that’s not the best way to look at these companies … You need to think long term.”

“It’s a multibillion-dollar industry,” Brochstein said. “These companies that people can buy right now are just a teeny, tiny fraction of the industry. They get a lot of focus because people can invest in them, but the reality is that better companies are going to be what you want to invest in. It’s just a question of when they come.”

Wall St. Cheat Sheet echoes the sentiment that investors should steer clear of marijuana stocks — at least for the moment — as prices are especially elevated. Instead, the publication suggests that those investors who cannot ignore the high of the speculative investments look for companies that are “poised to capitalize on the evolution of the market.”

One of the companies making itself a household name in the budding marijuana industry is Medical Marijuana (OTCPINK:MJNA), the first publicly held company focused on the medical marijuana and industrial hemp markets. The company produces a medical-grade end product, which, according to its website, uses a patented and proprietary technology that specializes in standardizing, producing and extracting phyto-cannabinoids.

Medbox (OTC Pink:MDBX) came into existence based on the simple principle that “all great industries thrive when automated and regulated.” Medbox’s claim to fame stems from its medicine dispensing systems. The company is looking to capitalize its patented technology on the medical marijuana industry.

Growlife (OTCBB:PHOT) is focusing its attention on making high-end progressive horticulture and lifestyle products. The company recently completed the first of what it calls a “GIFT” transaction, allowing fully licensed and compliant growers and dispensaries in well-regulated cannabis markets to spread their infrastructure costs over a period of time. The program is designed to help near-term infrastructure needs paired with long-term exclusive supply relationships.

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