What do Cara Therapeutics, Inc. (NASDAQ:CARA) and Scotts Miracle-Gro (NYSE:SMG) have in common? Very little.

Both are often categorized as marijuana stocks. Cara receives the designation because of its preclinical cannabinoid receptor agonist, CR701. Scotts is grouped among marijuana stocks because its Hawthorne Gardening subsidiary ranks as the top supplier of hydroponics products to cannabis growers.

It's been a good year for Cara so far in 2018, with the stock soaring more than 50%. Scotts Miracle-Gro, though, hasn't seen any miracle growth. Its stock is down more than 30% year to date. But which of these stocks is the better buy now? 

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The case for Cara Therapeutics

There are several reasons why Cara Therapeutics should be attractive to many investors. At the top of the list is the potential for lead candidate Korsuva in treating chronic kidney disease-associated pruritis (CKD-aP) in patients on hemodialysis. 

Cara is currently evaluating an injectable form of Korsuva in two phase 3 clinical studies for CKD-aP. Data from both studies are expected next year. The drug has already caught the eye of a major partner. Vifor Fresenius Medical Care Renal Pharma, a joint venture between Swiss drugmaker Vifor Pharma Group and large dialysis provider Fresenius Medical Care, licensed Korsuva for the CKD-aP indication in markets outside of the U.S., Japan, and South Korea.

And if the Korsuva injection fares well, it could be promising for Cara's oral version of the drug. The biotech is testing oral Korsuva in a phase 2 study for treating patients with CKD-aP who aren't on hemodialysis. Cara also has hopes that Korsuva could be effective in treating other types of pruritis. It's conducting a phase 1 study of oral Korsuva in treating chronic liver disease-associated pruritis (CLD-aP). 

Korsuva is an opioid -- but it's different from current opioids that are commonly used in that it doesn't easily penetrate the blood-brain barrier. As a result, the drug doesn't have the negatives associated with most opioids, such as the potential for addiction, nausea, and vomiting. Cara announced positive results in June from a phase 2/3 study of an intravenous version of CR-845 (the non-branded name for Korsuva) in managing pain in patients undergoing abdominal surgery. The company is seeking a partner for the drug for this indication.

Cara's market cap currently stands below $750 million. Jefferies analyst Matthew Andrews projects that Korsuva could generate peak annual sales of more than $570 million in treating CKD-aP in patients on dialysis. With reasonable prospects for success in the late-stage studies for this indication, Cara looks like a solid growth pick. 

The case for Scotts Miracle-Gro

Let's first look at why Scotts Miracle-Gro stock has dropped this year. There were two primary reasons. First, the spring growing season started later than normal, which negatively impacted revenue for Scotts' consumer lawn and garden products. Second, California's launch of its recreational marijuana market didn't go as well as expected. That hurt Scotts' Hawthorne Gardening subsidiary's sales.

The good news, though, is that both of these are only temporary issues. Over the long run, the changing climate could mean that the warmer growing seasons last longer than in the past. That could boost Scotts' consumer lawn and garden product sales.

In addition, the company is rolling out new products that could spark sales growth. For example, the new Miracle-Gro Performance Organics fertilizer launches next year. Scotts also plans to hike prices for some of its products, a move that should juice overall revenue.

The company's fortunes in the marijuana industry should improve as well. Scotts CEO Jim Hagedorn noted in his Q2 conference call comments that there's "some light at the end of the tunnel" in California's marijuana market. More states could also legalize either medical or recreational marijuana, especially as states see the tax revenue generated by marijuana in neighboring states.

In the meantime, Scotts Miracle-Gro gives investors something else to like. The company's dividend currently yields over 3%.

Better buy

Cara Therapeutics is definitely the better buy. But so is Scotts Miracle-Gro. It depends on your investing style.

Aggressive investors should find a lot to like with Cara. There's a risk that the clinical studies for Korsuva won't be successful. If they go well, though, Cara's share price should soar. The risk-reward proposition appears to be a good one for investors willing to take on the added risk associated with a clinical-stage biotech.

Conservative investors, however, will probably prefer Scotts Miracle-Gro. The company provides a way to profit from growth in the marijuana industry without taking on as much risk as buying a pure-play marijuana stock would entail. Scotts' core business gives it added stability. And its dividend yield looks pretty attractive, too.

While Cara Therapeutics and Scotts Miracle-Gro are very different, they do have one thing in common: The long-term prospects for both stocks should be good. 

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.