Although cryptocurrencies dominated headlines at the outset of 2018, by the end of the year legal cannabis has assumed the mantle of most-hyped new area of investment. A host of important changes took place across the year to bring about this transition: first, cryptocurrencies suffered devastating losses in the first few months of the year, and even the top digital tokens have so far been unable to recover their old splendor. Second, the legal cannabis space has grown at a tremendous pace in 2018. Certainly one of the biggest news stories of the year was Canada's legalization of recreational marijuana use for adults in October, but beyond that there have been many other signs of progress. More and more states in the U.S. have ratified measures legalizing some form of marijuana use. The first cannabis-based drug treatment received FDA approval. Top companies have expanded their operations dramatically. The overall number of pot stocks available to the everyday consumer has spiked.

One of the big questions on the minds of cannabis stock investors heading into 2019 is whether or not the momentum can be maintained going forward. Indeed, while 2018 was a banner year for many cannabis companies, it also brought about challenges to the nascent industry as well. Below, we'll take a look at three of the top- and bottom-performing cannabis stocks of the year.

Winners of 2018

1. CV Sciences (CVSI)

The top-performing cannabis stock in 2018 was CV Sciences (CVSI). This Las Vegas-based company trades its stock in over-the-counter markets; in the world of cannabis companies, OTC-traded names are routinely viewed with extreme skepticism. Many of these outfits are shoddy at best, or outright scams aiming to capitalize off of investor enthusiasm for the cannabis space at worst. A general sense of hesitation for OTC marijuana companies throughout the year saw many of these firms post stock price losses of 70% or more. CVSI stands out, not only among its competitors in this space, but also among cannabis companies which trade on the NYSE, Nasdaq, and other well-known exchanges.

CV Sciences focuses on both pharmaceuticals and consumer products. As the producer of the popular PlusCBD Oil product, CV Sciences worked throughout the last several years to develop a CBD-based drug treatment designed to treat tobacco use and addiction. This treatment plan is still in the preclinical phase as of this writing. Nonetheless, this small-cap company (with market cap of under $500 million) has drawn massive attention. In 2018, CVSI stock climbed by almost six times; year-to-date as of December 31, the stock has climbed by more than 579%. Whether this is a symptom of a cannabis company bubble remains to be seen.

2. Tilray, Inc. (TLRY)

Of cannabis companies traded on major exchanges, Tilray, Inc. (TLRY) had the strongest year. Since it became the first marijuana company to IPO in the U.S. in July, the stock has gained more than 215% year-to-date as of this writing. Still, Tilray has experienced some dramatic fluctuations; on September 19, the stock jumpted to about $300/sh before trading in the red and getting halted five times.

A key to Tilray's success since its IPO is the U.S. Drug Enforcement Administration's (DEA) approval for Tilray to import marijuana-based products from Canada to the U.S. With plans to continue to expand its operations around the globe and in the medical marijuana space in particular, TLRY will be a stock to watch in 2019.

3. Cronos Group Inc. (CRON)

Rounding out the top-performing marijuana companies of the year is Cronos Group Inc. (CRON). Cronos' gains are more modest than the stocks listed above. As of this writing, CRON has climbed by just over 28% year-to-date. The Toronto-based company had the distinction of becoming the first marijuana outfit to be listed on the Nasdaq early in the year.

Like other cannabis companies, Cronos experienced dramatic highs and lows this year. News emerged in December that Altria Group (MO), the makers of Marlboro cigarettes, would buy up 45% of Cronos for about $1.8 billion. Thanks in large part to that support, the stock has managed to ride out general market declines in the last few weeks of the year.

Losers of 2018

1. Zynerba Pharmaceuticals Inc. (ZYNE)

Although, as indicated above, many over-the-counter cannabis stocks performed exceptionally poorly, the largest decline among major exchange-traded marijuana companies in 2018 was Zynerba Pharmaceuticals Inc. (ZYNE). As of this writing, the stock has fallen by nearly 79% for the year.

Zynerba focuses on transdermally-delivered cannabinoid therapeutics aimed at addressing neuropsychiatric conditions like Autism Spectrum Disorder. The company delivered bad news about its ZYN001, a transdermal patch product which delivers THC to patients, in the middle of the year. While the company's ZYN002 cannabidiol gel, aimed at addressing a rare condition called Fragile X syndrome, appears to have potential, it has not been enough to sustain the company's stock price throughout the turbulent year.

2. Aphria Inc. (APHA)

Shares of Aphria Inc. (APHA) have fallen by more than 60% in 2018, even in spite of a rally in September which brought APHA shares into the black for the year. Aphria poses a cautionary tale about the speed at which the cannabis industry is growing. Earlier in December, shares of the company fell by more than 20% in a single day when accusations emerged that the company had engaged in overvalued acquisitions and fraudulent reporting. Although Aphria denied the accusations, the stock price plummeted nonetheless. The end of the year has brought more bad news: short-sellers are having a field day with APHA stock, and a new retail operation called Green Growth Brands Ltd. is aiming for a hostile takeover of the Canadian producer.

3. Aurora Cannabis Inc. (ACB)

Aurora Cannabis Inc. (ACB) has long been a darling of the growing cannabis industry. That makes it all the more surprising that ACB stock has fallen by more than 40% in 2018, making it one of the worst-performing marijuana stocks.

Earnings for the first quarter of FY 2019 played a large part in Aurora's disappointing stock performance toward the end of the year. The company lost more than CAD$111 million in operations costs aiming to increase capacity and buy up competitors. Coupled with volatile markets overall and skepticism about Aurora's capabilities to match its aspirations, the company's stock is in trouble heading into the new year.