Aurora Cannabis (NYSE:ACB) generated revenue over the past 12 months of less than $50 million. Scotts Miracle-Gro (NYSE:SMG) generated revenue of more than $2.6 billion during the same period. Which stock do you think has the higher market cap? 

The answer is that Aurora's market cap is now roughly $2.4 billion greater than Scotts' market cap. The gap is due to a big surge in Aurora's stock price starting in late July. Before that, Scotts Miracle-Gro claimed the higher market cap.

But which of these stocks is the better pick for investors now? Here's how Aurora and Scotts compare against each other. 

Marijuan leaf on top of $100 bill

Image source: Getty Images.

The case for Aurora Cannabis

I think there are three key ingredients to success for marijuana growers. First, they must have a significant production capacity. Second, they should be well prepared for the Canadian recreational marijuana market scheduled to open in October. And third, they should have strong international operations to take advantage of the rapidly expanding global medical cannabis market. Aurora Cannabis checks off all three boxes.

It's hard to keep up with Aurora's production capacity because the company is growing so quickly through acquisitions. At last count, Aurora was on track to be able to produce more than 570,000 kilograms of cannabis per year by the end of 2019. This figure includes the company's expansion projects under way and its recent acquisition of MedReleaf. But Aurora claims even greater capacity thanks to its supply deal with The Green Organic Dutchman (TGOD). Aurora also owns a stake in TGOD. 

Aurora eagerly awaits the opening of the floodgates next month, with Canada's market for the adult recreational use of marijuana. The company has secured supply agreements for recreational cannabis with several provinces, the most important of which is Ontario. Aurora invested in and partnered with Alcanna, a leading Canadian liquor store chain, with the two companies planning to open retail cannabis stores throughout Canada as soon as regulations permit. 

The greatest opportunity for Aurora Cannabis, though, lies in the global marijuana market. Aurora's Pedanios subsidiary gives it a firm footing in Germany, the largest international medical marijuana market outside North America, and a great launchpad for the rest of Europe.

Aurora recently announced two acquisitions that expand its international operations. The company acquired AgroPro, Europe's largest organic hemp producer. It also plans to buy ICC Labs, a leader in the South American cannabis market. In addition, Aurora either already exports or will export medical cannabis to Australia, the Cayman Islands, Malta, and South Africa.   

The case for Scotts Miracle-Gro

While Aurora's focus is on Canada and international markets outside the U.S., the reality is that the U.S. is still by far the world's largest cannabis market. Marijuana sales in the U.S. are projected to increase to $22 billion by 2022. Scotts Miracle-Gro should be a prime beneficiary from that growth.

Scotts has been steadily beefing up its cannabis-focused Hawthorne Gardening subsidiary for several years with multiple acquisitions. The company's purchase of Sunlight Supply in April solidified Hawthorne's spot as the top supplier of hydroponics products for the U.S. cannabis industry. 

Hawthorne is especially well positioned in California, which is the biggest marijuana market in the U.S. and is projected to have total marijuana sales of $7.7 billion by 2022. California's legal recreational marijuana market got off to a weaker-than-expected start in 2018. However, Scotts Miracle-Gro CEO Jim Hagedorn stated in the company's Q2 conference call that there were signs of improvement in the state. The company remains confident about the California marijuana market over the long run.

There are quite a few other states with significant cannabis markets as well. More states could also legalize recreational marijuana. For example, Connecticut, New Jersey, and New York look like top candidates to allow legalize recreational pot in the not-too-distant future. These three states combined represent a potential market that's even larger than California.

Of course, Scotts Miracle-Gro's primary business continues to be consumer lawn and garden products. Sales of these products generate around 92% of the company's total revenue. This business gives Scotts a solid cash flow that allows it to pay a dividend that currently yields 2.87%. The company is launching new products that could drive growth. Scotts should also benefit if predictions of warmer temperatures in the future come true.

Better buy

My view is that both Aurora Cannabis and Scotts Miracle-Gro should be winners over the long run -- albeit with plenty of volatility along the way. I like Scotts better, though, because it's a safer pick thanks to its consumer lawn and garden business. It's also by far the better bargain.

Aurora could continue to perform better than Scotts over the near term, however. Two potential catalysts, in particular, could provide big boosts to the stock: listing on a U.S. stock exchange (which the company is planning to do) and the possibility of being selected as the cannabis partner for a major company outside of the cannabis industry. But if you're looking for the better long-term bet, I still think Scotts Miracle-Gro gets the nod.