Big Canadian marijuana stocks have taken a beating. Aurora Cannabis (NYSE:ACB) got off to a horrible start during its first week of trading on the New York Stock Exchange. Canopy Growth (NASDAQ:CGC) lost over 25% of its market cap in just the last week.

But there's one new marijuana stock that has weathered the storm pretty well. In fact, its performance is trouncing Aurora, Canopy, and nearly every other marijuana stock so far this year.

Which new marijuana stock is it? Origin House (OTC:ORHOF). The stock began trading on the Canadian Stock Exchange (CSE) and over the counter in the U.S. on Oct. 22. But the catch is that Origin House isn't really new.

Hands holding $100 bills with a marijuana leaf on top.

Image source: Getty Images.

A new identity

Until last week, Origin House was known as CannaRoyalty. What was behind the name change? The company wanted a new corporate identity that reflected its goal to become the "preeminent global house of cannabis brands." 

CannaRoyalty represented the company's roots. Its initial business model centered on cannabis royalty streaming, where the company provided financing to marijuana businesses in exchange for a percentage of crop production or an equity stake. But the company's strategy changed along the way. 

Origin House primarily focuses now on the distribution of cannabis products in California. The state boasts the largest legal marijuana market in the world. And Origin House ranks as the No. 1 distributor in the California marijuana market. 

The company currently has over 50 brand partners. It distributes more than 130 branded cannabis products to roughly 70% of the retail dispensaries in California. Origin House also owns and markets several of its own brands.

But while Origin House is a major player in the huge California market, it hasn't overlooked the opportunity in Canada. In September, the company announced that it was acquiring 180 Smoke, a leading vape retailer with 26 stores and a strong online presence. 

Good things on the horizon

With a new name, new logo, and new stock ticker, Origin House expects there will be plenty of good things on the horizon. CEO Marc Lustig said that the first half of 2018 was a little difficult in California due to a bumpy launch of the state's recreational marijuana market. Now, though, Lustig thinks the situation is "pretty awesome."

He expressed confidence that Origin House will be profitable in 2019. Technically, the company reported a profit in the second quarter. However, the positive bottom line stemmed from gains from the sale of assets. But Origin House now appears to be on a solid path to sustainable profitability.

At least one analyst projects that Origin House will generate nearly 200 million in Canadian dollars next year and CA$425 million in 2020 -- around US$325 million. Origin House doesn't provide revenue guidance at this point, but the analyst estimates should be achievable. 

Lustig stated that the company currently makes around 70% of its revenue from distribution and 30% from its private brands. His goal is to shift the revenue mix close to 50-50 by early 2019. Origin House plans to make this happen by launching one new brand each month.

This is part of Origin House's three-phase long-term strategy. The company intends to first continue building its foundation as the leading cannabis product distributor in California. Phase two is to use the data it gathers from its distribution operations to "internalize and accelerate" -- bring more winning brands in-house and promote its brands in the California market. 

Phase three of Origin House's strategy could provide an even greater return over the long run. The company plans to replicate its success in California in other high-growth markets. The 180 Smoke acquisition represents one example of this effort. Lustig has indicated that Origin House could also expand into neighboring Nevada in the future. However, he's adamant that the company will be disciplined in how it grows rather than move into new markets without laying the groundwork effectively to do so.

Better than the big boys?

As mentioned earlier, Origin House is handily beating the stock performance for most other marijuana stocks, including two of the biggest: Canopy and Aurora. But is Origin House a better long-term stock to buy than the "big boys" of the industry? I think it is.

Investment firm Beacon Securities believes that distributors and retailers could be "king-makers" of cannabis brands. I agree with that view, especially in the U.S. market. Origin House is well positioned to crown some of its own brands in addition to those of its brand partners.

Canopy Growth, Aurora Cannabis, and their peers have their hands tied when it comes to operating in the U.S. But Origin House doesn't. It's important to remember that the U.S. accounts for 85% of total global marijuana sales. Even with Canada's recreational marijuana market now open and medical cannabis markets ramping up in other countries, the U.S. will still generate close to three-quarters of legal marijuana sales in 2022. 

Then there's valuation. Even after the steep declines recently, Canopy's market cap stands close to $8 billion, while Aurora's market cap is nearly $7 billion. Origin House's market cap is closer to the $300 million mark. With potential sales in the ballpark of $250 million by 2020, the stock's valuation based on its realistic growth potential looks quite attractive over the near term. I can't say the same thing about the well-known major marijuana stocks.

In August, I wrote that CannaRoyalty was the best under-the-radar marijuana stock I've seen so far. That's no longer true. Now it's Origin House.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.