They're the giants among marijuana stocks. But they're as different as night and day.

Canopy Growth (NYSE:CGC) ranks as the biggest pure-play marijuana stock on the planet right now, with a market cap of $4.6 billion. GW Pharmaceuticals (NASDAQ:GWPH) comes in second with a market cap of $3.8 billion. The former is the largest Canadian supplier of medical marijuana, while the latter is a cannabinoid-focused biotech.

Which of these two is the better marijuana stock? Here's how Canopy Growth and GW Pharmaceuticals compare.  

Marijuana bud over blurred image of $100 bills and $50 bills

Image source: Getty Images.

The case for Canopy Growth

Investors have flocked to Canopy Growth for three primary reasons. One is that the medical marijuana market in the company's home country of Canada is growing like a weed (pardon the pun). Canopy Growth's sales soared more than 120% year over year in its latest quarter, with most of its revenue stemming from domestic medical cannabis sales. The Canadian medical marijuana market should continue to be a strong source of growth for Canopy, with total annual sales in the industry projected to more than triple by 2024. 

But an even bigger opportunity for Canopy Growth could be just around the corner. Canada appears to be on track to legalize recreational use of marijuana later this year. Estimates vary on just how big the market might be, but $6 billion annually isn't unrealistic. Canopy Growth should be well-positioned to capture a significant chunk of that market.

The company doesn't only have its targets focused on its home front. Canopy Growth already has a nice foothold in the German medical marijuana market, thanks to its 2016 acquisition of MedCann. With a population more than twice the size of Canada, Germany presents a huge opportunity for the company. Canopy has also expanded operations through partnerships and joint ventures into several other countries, including Australia, Brazil, Chile, Denmark, Jamaica, and Spain.

Canopy Growth's success hasn't gone unnoticed by even bigger companies. S&P 500 member Constellation Brands, which distributes Corona Beer and a long list of other alcoholic beverages, bought a 9.9% stake in Canopy for $245 million last year. The two companies plan to partner on launching a cannabis-infused beer.

One area where Canopy Growth doesn't have its sights set for now, though, is the U.S. Canopy stock is listed on the Toronto Stock Exchange, which has listing regulations prohibiting marijuana growers from having significant operations in the U.S. because of federal laws prohibiting the sale and use of the drug. Should those U.S. laws change, it would present yet another major opportunity for Canopy to grow.

The case for GW Pharmaceuticals

GW Pharmaceuticals developed the world's first plant-derived cannabinoid prescription drug Sativex. The drug is approved in multiple countries for treating spasticity associated with multiple sclerosis, although the U.S. isn't one of those countries. But Sativex isn't the primary attraction for investors.

Within the next two months, GW Pharmaceuticals could win FDA approval for the drug that is the primary reason investors like the stock -- Epidiolex. The cannabinoid targets treatment of two rare forms of childhood-onset epilepsy -- Dravet syndrome and Lennox-Gastaut syndrome (LGS). 

A few weeks ago, an FDA advisory committee voted unanimously to recommend that Epidiolex be approved for both targeted indications. While the FDA doesn't have to abide by that recommendation, it certainly appears likely that the drug will receive a thumbs-up.

GW Pharmaceuticals' next step would be to secure scheduling of Epidiolex by the U.S. Drug Enforcement Administration (DEA), which should take no longer than 90 days after FDA approval. The biotech hopes to launch Epidiolex by September of this year. 

Market research firm EvaluatePharma thinks that Epidiolex will be one of the 10 biggest new drug launches of 2018. The firm projects that the drug will generate annual sales of close to $1 billion by 2022. 

GW is also evaluating Epidiolex in clinical studies targeting two other indications -- tuberous sclerosis and infantile spasms. In addition, the company's pipeline includes cannabinoid candidates for the treatment of autism spectrum disorders, glioblastoma, and schizophrenia.  

Better marijuana stock

There's no question in my mind that sales will soar for both Canopy Growth and GW Pharmaceuticals. Both which is the better growth stock? It comes down to the potential market sizes for each company.

I suspect that GW Pharmaceuticals could achieve the $1 billion annual sales level with Epidiolex. If the biotech wins more approvals beyond the first two indications for the drug, GW's sales could go even higher.

But I think that the potential market for Canopy Growth is even greater. If the company can claim 20% or more market share of the recreational marijuana market in Canada, the company's sales should increase to at least $1.5 billion annually. The international medical marijuana market opportunities should be much larger than Canopy's domestic marijuana market, including both medical and recreational use.

Canopy's market cap is currently around 20% higher than GW's market cap. However, my view is that Canopy's potential annual market is at least double the size of GW's market. The math is straightforward: I think Canopy Growth is the better marijuana stock.

Keep in mind, though, that both of these stocks have significant risks. For GW Pharmaceuticals, there's the possibility that the commercial launch of Epidiolex doesn't go as well as hoped or that rival drugs win approval. For Canopy, there's the potential of delays or roadblocks in the legalization of recreational marijuana and the possibility of supply demand imbalances. While I view Canopy Growth as the better marijuana stock of the two, it probably isn't the best choice for risk-averse investors.  

Keith 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.