Awful. Bad. Crummy. Dreadful. A-B-C-D. I probably don't have to finish going through the alphabet to paint the picture for just how horrible the month of July was for cannabis stocks. But there were some cannabis stocks that actually delivered nice gains in July.

Neptune Wellness Solutions (NASDAQ: NEPT), Charlotte's Web Holdings (OTC: CWBHF), and Scotts Miracle-Gro (NYSE: SMG) jumped by double-digit percentages last month while most cannabis stocks tanked. Here's why these three stocks outperformed all the rest and if any of them are smart picks to buy now. 

1. Neptune Wellness Solutions

Neptune Wellness Solutions emerged as July's biggest winner among cannabis stocks with its shares soaring 31%. The company focuses on the extraction of cannabinoids from cannabis and hemp plants for use in health and wellness products. 

This stock's winning ways didn't begin in July, though. Neptune ranked as one of the top five best-performing cannabis stocks so far in 2019 at the beginning of last month. The company benefited from investors' excitement over its extraction deals with major cannabis producers Tilray and The Green Organic Dutchman.

Neptune had several key developments in July. It named Michael Cammarata as CEO. Cammarata co-founded wellness company Schmidt's Naturals, which was acquired by Unilever in 2017. Neptune closed a $41 million private placement during the month. And it completed the acquisition of SugarLeaf in a deal that boosted its U.S. extraction operations. All of this was enough to spur additional interest in this high-flying cannabis stock.

2. Charlotte's Web Holdings

Charlotte's Web Holdings stock jumped nearly 21% in July thanks to a surge in the final week of the month. The company pioneered the hemp cannabidiol (CBD) market several years ago and ranks as a leader in the market today.

The biggest story for Charlotte's Web heading into July was its announcement in June about its 2019 hemp acreage. In 2018, the company planted 300 acres of hemp. Charlotte's Web is increasing that amount by 187% to 862 acres this year in anticipation of a huge increase in demand for hemp CBD.

Investors were fired up even more in late July, though, with the news that Kroger, the largest grocer retailer in the U.S., is now selling Charlotte's Web products. Kroger plans to roll out Charlotte's Web hemp CBD topical products to 1,350 stores in 22 states.

3. Scotts Miracle-Gro

Scotts Miracle-Gro claimed the No. 3 spot among the top-performing cannabis stocks in July with a 14% gain. The consumer lawn and garden products maker is also now the top supplier of gardening products to the cannabis industry.

Like Charlotte's Web, Scotts Miracle-Gro enjoyed a late-month surge. Investors appeared to anticipate good news in Scotts fiscal 2019 third-quarter results in the days leading up to July 31. And when the company announced its results after the market closed on the last day of the month, it didn't disappoint.

Scotts handily beat Wall Street revenue and earnings estimates for the quarter. The company's Hawthorne segment, which serves the cannabis industry, posted especially impressive year-over-year sales growth of 138%. Scotts' core U.S. consumer lawn and garden business also performed well, delivering revenue growth of 10% over the prior-year period. 

Are they buys?

I really like two of these three stocks. The lone exception is Neptune. While I think the company should pick up momentum as the U.S. hemp market and the Canadian cannabis derivatives market grow, my view is to watch Neptune from the sidelines for now to make sure it can establish a clear pathway to profitability.

Charlotte's Web and Scotts Miracle-Gro, on the other hand, already rank among the most profitable cannabis stocks on the market. Even better, I think that both of these stocks have plenty of room to run.

You can bet that the U.S. hemp CBD market is going to grow by leaps and bounds. Kroger's decision to carry Charlotte's Web products is one more confirmation of this. I expect that Charlotte's Web will continue to grow rapidly.

Another pretty safe bet is that medical cannabis and recreational marijuana markets throughout the U.S. will also grow significantly. Scotts' Hawthorne segment is in a great position to benefit from this growth. I also expect that Scotts' new organic products will continue to drive sales growth for its U.S. consumer segment.

July was a hot month temperature-wise and a hot month for Charlotte's Web and Scotts Miracle-Gro. But I think the future for these two cannabis stocks could be even hotter.

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