If you don't like one part of the cannabis industry, there's always another to invest in. Two companies that provide examples of the alternatives available to investors are Aurora Cannabis (ACB -6.04%) and MedMen Enterprises (MMNF.Q). Aurora ranks as one of the largest Canadian marijuana producers, while MedMen is the largest cannabis retailer in the U.S.

So far in 2018, MedMen wins hands-down when it comes to stock performance. But investors are more focused on the future than the past. Which is the better marijuana stock now -- Aurora or MedMen?

Shadow of dollar sign on top of pile of marijuana leaves

Image source: Getty Images.

The case for Aurora Cannabis

Aurora Cannabis could be crowned the king of capacity in the global cannabis market. The company claims a funded annual production capacity of over 500,000 kilograms (about 1.1 million pounds). But that doesn't include Aurora's acquisition of ICC Labs, a deal that will boost its capacity even more.

Make no mistake about it: Capacity is critical to success. Neither Aurora nor any of its peers can generate revenue without products to sell. The key, though, is to have enough demand to absorb all of the production capacity.

That's definitely not a problem right now. Aurora is able to sell all it can produce in its home country of Canada. However, the company's current production capacity isn't anywhere close to where it will be over the next couple of years. 

Aurora is certainly a major competitor in the Canadian medical and recreational marijuana markets. The company lined up supply agreements with provinces comprising 98% of the country's total population. While Canada presents a significant opportunity, Aurora knows that its long-term fortunes depend on international expansion.

That's why Aurora has established itself as a key player in medical marijuana markets across the world. The most important of these markets, for now, is Germany. Aurora's acquisition of Pedanios in 2017 gave it a strong foothold in the German market. Thanks to its partnerships, joint ventures, and other acquisitions, the company also has operations in several other countries, including Australia, Brazil, Colombia, Denmark, Italy, Malta, Mexico, South Africa, and Uruguay. 

Aurora's current market cap of around $7 billion looks really steep based on the company's past sales. But if the global market becomes as large as some observers predict -- upwards of $100 billion -- Aurora's share price should still have plenty of room to run.  

The case for MedMen Enterprises

The primary investing argument for MedMen Enterprises is pretty straightforward. The U.S. remains by far the biggest marijuana market in the world. MedMen is the top retailer in the U.S. As the U.S. market grows, so will MedMen.

There's no question that the U.S. is the 800-pound gorilla in the global marijuana market. Legal marijuana sales are projected to top $22 billion by 2022. There's also no question that MedMen is the top retailer in the U.S. cannabis market. The company currently operates 14 retail cannabis stores in three states.

But MedMen should soon become much larger. The company recently announced that it was buying PharmaCann for $682 million, the biggest acquisition in the history of the U.S. marijuana industry. This deal will make MedMen the largest U.S. cannabis company, with 66 retail locations and 13 cultivation/production facilities.

It's where those retail dispensaries and cultivation facilities are that makes MedMen especially attractive. The company already operates in the biggest prize of all -- California -- plus Nevada and New York. MedMen's acquisition of Treadwell Nursery also puts the company in Florida, which is projected to be the No. 3 marijuana market in the U.S. by 2022.

The PharmaCann deal, though, will give MedMen a presence in additional states: Illinois, Maryland, Massachusetts, Michigan, Ohio, Pennsylvania, and Virginia. When the acquisition is finalized, MedMen will operate in 12 states that together generate more than half of total U.S. marijuana sales.

But MedMen isn't limiting itself only to the U.S. The company also partnered with Cronos Group to launch retail cannabis stores in Canada. 

Better marijuana stock

The cases for both Aurora Cannabis and MedMen rely on key growth assumptions. I think that the growth assumptions for MedMen are more realistic over the next few years. And that gives MedMen the edge over Aurora.

Aurora, at least for now, can't establish operations in the U.S. That puts the company at a big disadvantage when it comes to growth potential. While the situation might change in the future in a way that allows Aurora to enter the U.S. market, there's no guarantee if or when it will happen.

Probably the main obstacle for U.S. marijuana growth projections to be achieved is the possibility of the federal government cracking down on cannabis-related businesses in states that have legalized marijuana. I think the likelihood that this scenario will occur continues to decrease. That's good news for MedMen.

MedMen stock is still expensive, though. I'd personally prefer to see the company finalize the PharmaCann transaction and generate significant revenue and earnings before calling the stock a surefire buy. However, I think MedMen is the better marijuana stock when compared to Aurora, and is one for investors to keep on their radar screens.