If you're familiar with the U.S. marijuana industry, you might think the headline of this article contains a mistake. Marijuana sales in the U.S. are estimated to have totaled $6.7 billion last year. So why would a cannabis market be worth only $1 billion by 2020? The answer is that there are multiple cannabis markets. Marijuana and hemp both come from the cannabis sativa plant, but hemp is a variety of the plant that contains much lower levels of the psychotropic chemical tetrahydrocannabinol (THC) than marijuana does. Because of this, the Ninth Circuit Court of Appeals has ruled that the U.S. Drug Enforcement Agency (DEA) can't go after companies that sell hemp-based products as they can for marijuana growers. While there are many industrial uses for hemp, one of the fastest-growing markets is hemp-based cannabidiol (CBD). Market research firm Brightfield Group estimates that this market totaled $170 million last year and could hit $1 billion within the next three years. And there's only one small-cap stock poised to profit from this tremendous growth -- Medical Marijuana Inc. (NASDAQOTH: MJNA). Image source: Getty Images. Ironic name The ironic thing about Medical Marijuana, Inc.'s name is that the company doesn't sell marijuana at all -- for medical or other purposes. Medical Marijuana says that it's "not in the business of selling or dispensing either recreational or medical marijuana, directly or indirectly, so long as marijuana remains a federally controlled substance." All of Medical Marijuana's products are hemp-based. The company's flagship product is Real Scientific Hemp Oil (RSHO). The CBD oil is available in three varieties. Medical Marijuana's subsidiary Red Dice Holdings also markets CBD products under the Dixie Botanicals brand in Colorado. In addition, the company's Kannaway multi-level marketing subsidiary sells several types of CBD products, including "energy chews," a skin-care line, and hemp vaporizers. The company was founded in 2005 as Berkshire Collections. Four years (and two name changes) later, Medical Marijuana Inc. went public, becoming the first U.S. stock focused exclusively on the cannabis business. Multiple players Medical Marijuana's market cap now stands at more than $300 million. That's actually one of the larger market caps among cannabis stocks. And it's sizable enough to make Medical Marijuana the only small-cap stock focused on the hemp-based CBD market. There are other contenders in that market, of course. CW Hemp, which markets hemp-based CBD oil under the Charlotte's Web brand, has around 7% of the market. CV Sciences claims a 5% market share with its Plus CBD Oil products. Elixinol and Hemp Life Today are tied with Medical Marijuana, at 2% of the market. The rest of the hemp CBD market is highly fragmented, with lots of tiny competitors. One of these rivals to Medical Marijuana is publicly traded -- CV Sciences. However, CV Sciences' market cap is below $25 million, making it a nano-cap stock. Another company in the hemp CBD market, Isodiol International (formerly Laguna Blends), is traded on the Canadian Stock Exchange. Isodiol's market cap, though, is less than $200 million, a level that qualifies it as a microcap stock rather than a small-cap stock. Growing market, good investment? With the hemp CBD market potentially growing tremendously in the next few years, is Medical Marijuana stock a smart pick? I'd recommend caution. Remember that this $1 billion market is only a projection. Many projections don't pan out. There's a clear and present danger that could make this projection fall apart: the increasing number of U.S. states that are legalizing marijuana, especially recreational marijuana. Brightfield Group suspects that hemp CBD markets will be threatened by recreational marijuana. Medical Marijuana states that it's "poised" and "well-positioned for eventual cannabis legalization." However, all of its current products are already legal. Continued legalization of marijuana could potentially hurt the company's prospects. Also, Medical Marijuana continues to lose money -- a lot of it. In 2016, the company reported revenue of just over $8 million, with a net loss totaling $25.9 million. The stock is priced at more than 38 times sales. That's an astronomically high valuation. It's entirely possible that Brightfield Group's forecast of a $1 billion hemp CBD market by 2020 will prove to be accurate. If that happens, Medical Marijuana stock will likely benefit significantly. Buying the stock is probably the best bet for those wanting to profit from the growing CBD market. But in my view, it's a bet -- not an investment.10 stocks we like better than Medical Marijuana, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Medical Marijuana, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of August 1, 2017Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.