Five states including California will vote on whether to legalize recreational marijuana next month, and Arkansas and Florida will vote on whether to legalize marijuana for medical purposes, which could boost stocks in the sector.

Legalization in Florida was narrowly defeated in 2014.

Over the past 30 days, the S&P 500 has fallen more than 1%, but the North American Marijuana Index increased 83%.

The stocks below are just three of the 23 constituents that form the North American Marijuana Index. These companies already have racked up market-beating gains, which will continue next month and beyond if marijuana legalization is successful.

Keep a close eye on these stocks, and be ready to buy on dips as volatile markets continue through the end of this month.

All eyes will be on California. A vote to legalize there will provide strong momentum for the other six states' legalization initiatives.

California's population comprises more than 12% of the total U.S. population. Florida is the third most populated state, with 6.3% of the population.

Successful votes in these states could lead to upsets in Arizona and Massachusetts that have encountered push-back from anti-legalization groups. The other states with marijuana legalization on their ballots are Maine and Nevada.

In partnership with rapper Snoop Dogg's Leafs brand, Canopy Growth is ready to roll out three new strains of marijuana across Canada by the end of the month.

That is exciting news for the recreational marijuana user in Canada, but what does it mean for the company's earnings? The answer decides whether investors should expect significant share price gains.

Let's look at the the three stocks.

1. Aurora Cannabis (ACBFF)  
This company is one of the only producers turning a profit at $427,000 and $1.95 million in the fourth quarter last year and the first quarter, respectively.

Aurora Cannabis achieved two major milestones in the past 30 days that one would expect of a young growth stock.

First, the company's shares were moved to the Toronto Stock Exchange's Venture Exchange.

This milestone reflects "remarkably rapid operational and commercial progress," Chief Executive Terry Booth said.

Second, the company said this month that it will issue up to $25 million in convertible debt.

This offering makes Aurora Cannabis one of the best capitalized companies in the cannabis sector, Booth said.

Following the offering, the company converted $15 million of pre-existing convertible debt into about 13 million shares of stock. The dilution of the company's outstanding shares is providing investors with an opportunity to buy the stock below $1.70.

2. Canopy Growth (TWMJF) CGC: Toronto
Snoop Dogg's endorsement would give Canopy Growth an edge against its Canadian peers once recreational markets become available. This advantage would become especially pronounced once Canadian marijuana producers start looking to recreational markets in the U.S.

Although Canopy Growth hasn't been profitable in the past three quarters, its sales growth has been attractive. Over the past nine quarters, the company's total sales have grown an average 57% each quarter from $176,000 in the second quarter of 2014 to $5.38 million in the second quarter this year.

3. GW Pharmaceuticals (GWPH)
The company is based in the U.K. and is licensed to grow marijuana by the British government.

GW Pharmaceuticals has been in the news this year because of its cannabis-based treatment for epilepsy, Epidiolex. The treatment uses the non-psychoactive chemical found in marijuana, cannabidiol, to reduce the number of seizures in patients with Dravet syndrome and Lennox-Gastaut syndrome.

The company plans to file Epidiolex for Food and Drug Administration approval to treat the epileptic syndromes early next year with expectations of launching the drug by the end of 2017 or early 2018. These syndromes are difficult to treat so the company's success here might open the door for it to be one of the premiere makers of epilepsy drug treatments.

Investors can expect the company's share price to increase by more than 50% if the drug receives FDA approval and goes on to treat other forms of epilepsy.

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The author is an independent contributor to the Street.com. At the time of publication, he owned none of the stocks mentioned.