Are you looking for the next big cannabis investment? Valuations are high right now, as over the past year the Horizons Marijuana Life Sciences ETF (OTC:HMLSF) has soared more than 140%. That's well above even the S&P 500 index and its remarkable gains of 70% over that time frame. That means you will be paying a hefty premium for many pot stocks right now.

However, there's one popular way to get in early (and secure a cheap valuation) on what might be the next big thing. That's by investing in a special purpose acquisition company (SPAC). Investing in a SPAC is a riskier move, since you don't have years of financial records to sift through and analyze, but if you are willing to take a chance, a SPAC could set you up for some strong gains. And there's one that is particularly attractive that you should keep a close eye on today: Greenrose Acquisition Corp (NASDAQ:GNRS)

Marijuana leaf with U.S. flag in the background.

Image source: Getty Images.

Why Greenrose presents an incredible opportunity for cannabis investors

At a market cap of just over $200 million, Greenrose isn't anywhere near the big players of the cannabis industry -- Canopy Growth's market cap is nearly $13 billion, while multistate operator Curaleaf isn't too far behind at just under $11 billion. And that's just one reason why it should grab your attention. Investing in the SPAC today could pay off in spades.

Normally, my personal philosophy is that many SPACs are too high-risk and not worth the heartache that can come with a newly-public business. But if you are investing in a SPAC with reputable management and deals already in place, it can help lessen the overall risk. Greenrose isn't run by a former marijuana CEO, but William Harley is a former hedge fund manager (and Hooters franchise owner), so he knows a thing or two about running businesses and managing risk.

The company also recently announced not one but four deals to enter the U.S. cannabis market. The acquisitions of Shango Holdings, Futureworks, Theraplant, and True Harvest will give Greenrose a presence in seven states. And what investors will like is that these companies are in some of the hottest states to be in if you are running a marijuana business -- California, Colorado, Michigan, Nevada, Oregon, Arizona, and Connecticut. Colorado just surpassed the $10 billion mark in marijuana revenue since it first legalized pot in 2014. California, meanwhile, is the hottest marijuana market in the world, posting $4.4 billion in sales in 2020.

Greenrose will own nine dispensaries across all of those states and have the capability to produce up to 120,000 pounds of flower annually. On a pro forma basis, the company estimates its 2020 revenue would have totaled $83 million with an adjusted EBITDA of $32 million. In 2021, it is projecting $158 million in sales and $56 million in adjusted EBITDA (still on a pro forma basis). Pro forma refers to what the company's numbers would look like if it owned the businesses for the entire year. Since Greenrose doesn't expect to close on these deals until at least the second or third quarter of this year, investors shouldn't expect to see it actually post these kinds of numbers in 2021.

But if the company's projections are right and these businesses generate this much in sales and adjusted EBITDA, Greenrose could be a rockstar stock to own. Posting anything resembling a profit is rare in the industry. And the average stock in the Horizons Marijuana Life Sciences ETF trades at more than five times its sales. At $158 million in annual revenue, that could put the stock at a market cap of nearly $800 million -- nearly quadruple its value today. A multiple of five times sales is also fairly low as Canopy Growth and Curaleaf trade at even higher premiums:

CURLF PS Ratio Chart

CURLF PS Ratio data by YCharts

The acquisition also means Greenrose will be moving off the NASDAQ

Greenrose says that before these deals are complete, it expects to move from the over-the-counter markets and on to the NEO exchange (Canada). Since cannabis remains illegal at the federal level in the U.S., the company can't continue its listing on the NASDAQ once it effectively becomes a marijuana business. This isn't unusual, and it is typical for cannabis companies in the U.S. Canadian-based marijuana companies do trade on the big exchanges, but that is also because marijuana is legal for recreational purposes in Canada, so the businesses aren't in violation of any federal laws.

Should you invest in Greenrose today?

Now that Greenrose has deals in place, it isn't nearly as risky of a buy as it was just a month ago. The company did say in the press release announcing these acquisitions that it is still going to pursue more opportunities both within the markets it will be in now, plus new ones. It also says that it will be cash-flow positive and have sufficient resources to carry out its growth strategy.

Greenrose is saying all the right things, and if its numbers prove to be correct, this could be a top pot stock to own. There are, of course, no guarantees given the company doesn't have a track record for investors to fall back on or financial results to analyze just yet. If you are not risk-averse and are comfortable with this uncertainty, Greenrose could be worth taking a chance on.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.