Just as there are many strains of marijuana, you could say there also are various "strains" of marijuana stocks. Two leading examples of this diversity are Cronos Group (NASDAQ:CRON) and GW Pharmaceuticals (NASDAQ:GWPH). The former is one of the top marijuana producers, while the latter is the largest cannabis-focused biotech. 

If we could only make a choice between these two marijuana stocks based on historical performance, Cronos Group definitely would be the winner. It ranks as the best-performing marijuana stock of all time. But the future is what's important in investing, so which of these two stocks have better prospects for delivering solid returns in the years to come?

Marijuana buds and bottle of CBD.

Image source: Getty Images.

The case for Cronos Group

Just a few days ago, the argument for buying Cronos Group would have been quite different from what it is today. What changed? Big tobacco company Altria (NYSE:MO) is forking over around $1.8 billion to buy a 45% stake in Cronos. It's the biggest deal in the cannabis industry since Constellation Brands invested more than $4 billion in exchange for a 38% position in Canopy Growth.

Cronos Group CEO Mike Gorenstein stated that the money that Altria is investing will enable Cronos "to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D [research and development] and brands that resonate with our customers." He's right on all counts.

The Altria deal immediately makes Cronos Group a more significant player in the global cannabis industry than it was before. And it already was a top competitor.

Even before the Altria announcement, Cronos was on track to be able to grow 117,000 kilograms of cannabis per year. The company secured key supply agreements for the recreational marijuana market in Canada and also landed a huge supply agreement with Cura Cannabis Solutions.

In addition, Cronos Group was active in international markets. The company partnered with pharmaceutical supplier Pohl-Boskamp to distribute medical cannabis products in Germany and negotiated a significant medical marijuana supply agreement in Poland. And Cronos has joint ventures in Australia, Israel, and Latin America, as well.

Now that Altria will own a sizable stake in Cronos Group (and an option to increase that stake to a majority interest), Cronos has a major partner and the capital to dramatically increase its operations domestically and internationally. If you think the global cannabis market is going to grow tremendously, Cronos Group just showed that it's positioned to capture a nice chunk of that market.

The case for GW Pharmaceuticals

There are completely different dynamics for GW Pharmaceuticals. The biotech's fortunes depend on success for cannabidiol (CBD) drug Epidiolex, which won FDA approval earlier this year.

GW Pharmaceuticals' market cap currently stands around $4 billion. Goldman Sachs analyst Salveen Richter projects that Epidiolex will achieve peak annual sales of $2.2 billion. Using the pharmaceutical industry average P/S ratio of around 4.5, the potential future market cap for GW would be nearly $10 billion.

But wait a second. Not everyone is so optimistic as Richter. Some analysts think that Epidiolex will bring in sales of $1 billion or so. That translates to a potential market cap closer to $4.5 billion -- not too much higher than GW's current market cap.

We're leaving out something important, though: GW Pharmaceuticals' pipeline. While Epidiolex won approval for treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), GW also is evaluating the drug in treating tuberous sclerosis complex (a genetic disorder that causes benign tumors to grow all over the body) and Rett syndrome (a rare genetic brain disorder).

GW Pharmaceuticals hopes to win U.S. approval for Sativex, a cannabinoid that's approved in several other countries, in treating multiple sclerosis spasticity. The biotech's pipeline also includes several other cannabinoids targeting neurological indications.

The bottom line is that GW has considerable upward potential if Epidiolex performs really well commercially. And it still could generate solid returns if the drug meets consensus expectations and its pipeline produces some successes.

Better marijuana stock

I've liked GW Pharmaceuticals for a long time, but my guess is that the stock will deliver decent but not spectacular results over the next few years. My view is that Cronos Group is more likely to be the bigger winner of these two stocks.

The Altria deal changes the dynamics for Cronos Group. The cannabis industry is here to stay, and it's going to grow much larger. And with one of the world's biggest tobacco companies now at its side, Cronos Group is poised more than ever to grow much larger, as well.

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.