You can count on one hand the number of Canadian marijuana stocks that trade on the Nasdaq stock exchange. And you'd have three fingers left over. Cronos Group (NASDAQ:CRON) became the first Canadian marijuana grower to list on the Nasdaq in February. Tilray (NASDAQ:TLRY) followed suit in July.

Both Cronos Group and Tilray have tremendous growth prospects. But which marijuana stock is the better pick for investors? Here's how Cronos and Tilray stack up against each other.

Marijuana leaves stacked in a pile.

Image source: Getty Images.

The case for Cronos Group

Cronos Group's opportunities are, in order of size, the medical marijuana market in Canada, the recreational marijuana market in Canada, and the global medical marijuana market. Let's look at how Cronos is positioned in each of these areas.

For now, most of Cronos Group's revenue is made in the Canadian medical marijuana market. In its Q2 results announced a few days ago, the company posted 234% year-over-year growth in medical cannabis sales of its Peace Naturals brand.

But Cronos' prospects in Canada's recreational marijuana market are much better. Some project that total recreational cannabis sales in the first year will top CA$5 billion. To become a major player in this market, companies must have ample production capacity and a solid distribution channel for the retail market. Cronos should have all of these bases covered.

Although the company currently can only produce around 6,650 kilograms of cannabis per year, Cronos is on track to have an annual production capacity of more than 40,000 kilograms later this year. It also formed a joint venture that plans to build a large greenhouse in Ontario with an annual production capacity of 70,000 kilograms. 

Cronos already has a customer for much of that capacity. The company recently signed a five-year supply agreement with Cura Cannabis Solutions. Cura will buy a minimum of 20,000 kilograms each year from Cronos' joint venture. In addition, Cronos Group is partnering with U.S.-based MedMen to launch retail cannabis stores throughout Canada.

What about Cronos Group's global presence? The company is the exclusive medical cannabis supplier for Pohl-Boskamp, a pharmaceutical manufacturer that distributes to the important German market. Cronos also has a joint venture in Australia and recently signed a deal with Delfarma to supply medical cannabis in Poland. 

The case for Tilray

Tilray has the same opportunities ahead of it that Cronos does. And it's in pretty good shape to compete in each of the same markets.

In the domestic medical marijuana market, Tilray already ranks among the top suppliers. In 2017, the company reported sales of US$20.5 million, most of which came from medical cannabis sales in Canada. 

Tilray should have plenty of capacity to meet the demand for recreational marijuana in its home country when the market opens in October. The company is expanding its facilities and expects to have 912,000 square feet of growing space by the end of this year, with 682,000 square feet of that space in Canada and the rest at its Portugal facility.

One area where Tilray has topped most of its competitors is in lining up agreements with provinces and territories to supply recreational marijuana. So far, the company has inked deals with five provinces and territories -- British Columbia, Quebec, Manitoba, the Northwest Territories, and Yukon. It's also gearing up for direct-to-consumer recreational cannabis sales.

Then there's the global opportunity. Tilray was the first Canadian marijuana grower to export medical cannabis to Europe. The company partnered with Noweda, which has a network of 16,000 pharmacies, to supply medical cannabis in Germany. Tilray also has supply agreements in place with distributors in other countries across the world, including Argentina, Australia, Brazil, Chile, Croatia, Cyprus, the Czech Republic, New Zealand, Peru, and South Africa.  

Better marijuana stock

Both of these companies should enjoy fantastic sales growth once Canada's recreational marijuana opens for business. However, I think that Tilray's growth will be stronger than Cronos Group's.

My view comes down to the factors we've already covered. Tilray currently has greater production capacity than Cronos does. I suspect the company will be able to sell all that it grows. Tilray's Portugal operations give it a great launching pad for supplying the European market. The company also has its foot in the door in more international markets than Cronos does.

I think that Tilray would be a great partner for a major alcoholic beverage maker wanting to keep up with Constellation Brands and Molson Coors Brewing, both of which have teamed up with Canadian marijuana growers. There's no guarantee such a partnership deal will come along for Tilray, though.

In addition, the company faces the risk that global markets won't expand as quickly as hoped, which could lead to high volatility for the stock. However, my take is that aggressive investors could see big gains over the long run by buying a small position in Tilray now.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.