Poor Aurora Cannabis (ACB -7.79%) and Canopy Growth (CGC -3.79%). They're the two biggest marijuana producers in the world in terms of capacity. They've both built major operations in Canada, Europe, and across the world. But neither of the companies can do business in the biggest marijuana market of all -- the U.S.

Meanwhile, a couple of Canadian marijuana companies that claim market caps only a fraction of the size of Aurora and Canopy have set up shop in a major way in the U.S. Liberty Health Sciences (LHSIF) and Origin House (ORHOF) aren't just doing business in Canada's southern neighbor, they're both leaders in their respective markets. And they look like better marijuana stocks to buy right now than the big players that can't expand into the huge U.S. market.

Rustic U.S. flag surrounded by marijuana leaves

Image source: Getty Images.

The great divide

You might be wondering why Liberty Health Sciences and Origin House are already in the U.S. while Aurora Cannabis and Canopy Growth can only dream of expanding into the lucrative market. The great divide is a result of the stock exchanges on which each company chose to list its stock.

Aurora Cannabis and Canopy Growth are both listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). The TSX doesn't allow marijuana-related companies listed on the exchange to operate in the U.S. as long as marijuana remains illegal at the federal level. The NYSE has similar restrictions. 

However, Liberty Health Sciences and Origin House are listed on the Canadian Securities Exchange (CSE). The CSE doesn't have any problems with marijuana stocks doing business anywhere as long as they provide full disclosure. 

So why don't Aurora and Canopy Growth change their listing to the CSE? It's a much smaller exchange than either the TSX or the NYSE. One reason why the market caps of Aurora and Canopy are so much higher than Liberty and Origin House is that their stocks have exposure to more investors. 

Two winning strategies

Trading on the CSE has opened the door for both Liberty Health Sciences and Origin House to thrive in the U.S. market. And they've done so with very different strategies.

Liberty focuses on the medical marijuana market in Florida. If you're thinking that's a small opportunity, think again. Florida is on track to become the third-largest marijuana market in the U.S., according to Arcview Market Research and BDS Analytics. The Sunshine State should have total marijuana sales of at least $1.7 billion by 2022.

What's great is that Liberty Health Sciences is one of only 14 licensed medical marijuana businesses in the state. By comparison, Canada has issued over 130 licenses, although some larger companies hold multiple licenses. Florida allows each license holder to operate up to 30 retail dispensaries throughout the state as well.

Entering Florida sign with a marijuana leaf on it

Image source: Getty Images.

Liberty currently claims a 15% market share in Florida, according to the company's CEO, George Scorcis. That market share could jump to 25% soon with Liberty boosting its production capacity early next year and opening additional dispensaries.

Origin House set its sights on California. The state is expected to generate $7.7 billion in marijuana sales by 2022. And Origin House is the top distributor of marijuana products in California, delivering more than 130 branded cannabis products to around 70% of the retail dispensaries in the state.

Several of those brands are owned by Origin House itself. The company plans to continue adding additional brands. Origin House hasn't forgotten its roots, though: It acquired 180 Smoke, a leading vape retailer in Canada, in a bid to establish a presence in the country's recreational marijuana market. 

A waiting game

Aurora Cannabis and Canopy Growth eagerly await changes to U.S. federal laws that would open the door to establishing operations in the world's biggest marijuana market. The recent midterm elections in the U.S. probably increased the likelihood of movement on that front. However, there's still a good chance that it could be years before Aurora or Canopy can expand into the U.S.

Meanwhile, Liberty Health Sciences and Origin House are playing a different kind of waiting game. These two companies look forward to the markets in which they compete growing significantly. This rapid growth looks like a pretty good bet.

But are Liberty Health Sciences and Origin House really better stocks to buy than Aurora Cannabis and Canopy Growth? I think so.

It will take a long time for either Aurora or Canopy to generate enough revenue to justify their high market caps. Liberty Health Sciences, though, could realistically be looking at annual sales of more than $400 million within the next few years. That's an impressive opportunity considering that Liberty Health Sciences' market cap is currently only around $350 million.

There's a great outlook for Origin House, too. Investment firm Beacon Securities projects that Origin House will make around $325 million in revenue by 2020. The company's current market cap is less than $400 million.

And even if U.S. laws change so that the big Canadian companies can enter the market, Liberty Health Sciences and Origin House should be able to defend their market positions. Aurora Cannabis and Canopy Growth will probably expand to the U.S. sooner or later, but they'll be late to the party. In my view, the biggest winners of the waiting game are the players that don't have to wait.