Plenty of marijuana stocks experienced tough times in 2018. Not Cronos Group (NASDAQ:CRON) and Origin House (OTC:ORHOF). Cronos is on track to gain close to 50% for the year, while Origin House should finish 2018 up more than 30%.

The factors behind these two stocks' strong performances in 2018 should continue to be important in the future. But which is the better pick for long-term investors? Here's what you need to know about how Cronos Group and Origin House stack up against each other.

Marijuana next to 3D bar chart

Image source: Getty Images.

The case for Cronos Group

One of the biggest and most successful tobacco companies in the world, Altria (NYSE:MO), wanted to enter the cannabis business. And it chose Cronos Group as its partner, spending around $1.8 billion for a 45% stake in the company. Either Altria made a really dumb move or Cronos Group has a lot to offer. There are several reasons to go with the latter theory -- reasons that also make Cronos a smart pick for investors without billions of dollars.

First, Altria thinks the global cannabis market "is poised for rapid growth over the next decade." It's kind of hard to argue convincingly against that proposition. Canada's recreational marijuana market just opened for business. There's a long list of countries with medical cannabis markets that are still in their early stages. 

Second, Altria believes that Cronos Group "has built capabilities necessary to compete globally." Again, that's a fair statement. Cronos has an annual production capacity of a little over 40,000 kilograms currently. The company's expansion projects, including its Cronos GrowCo joint venture, should boost that figure to more than 117,000 kilograms.

Capacity is just one part of the equation, though. Cronos Group has also developed a solid global distribution network. It teamed up with innovative U.S. cannabis retailer MedMen to open retail cannabis stores throughout Canada. Cronos formed joint ventures in Australia, Israel, and Latin America. And the company signed medical cannabis supply agreements with established businesses in Germany and Poland.

Cronos Group could also have a lottery ticket of sorts with its Ginkgo Bioworks partnership. The two companies are working together to produce high-purity cultured cannabinoids at scale using genetically engineered yeast strains. This effort could enable Cronos to produce large volumes of cannabinoids at low costs, a potential game changer in commercializing cannabis-infused beverages and other products.  

In addition to all of these positives, Cronos now has Altria at its side. Altria has years of expertise in navigating highly regulated markets. The company also knows a thing or two about building successful consumer brands. Of course, the cash from the Altria deal also puts Cronos in a great position for expansion.

The case for Origin House

Origin House probably deserves the award for best transformation by a marijuana company. It started out as CannaRoyalty, a name that gave a clue about its business model of making royalty streaming deals with Canadian cannabis growers. But the company's focus changed a lot -- and so did its name just a couple of months ago.

Royalty streaming isn't Origin House's primary business now. Instead, the company has morphed into the largest distributor of cannabis products in California, which happens to be the world's largest legal marijuana market. There's also a nice side benefit of being the top cannabis distributor in the top cannabis market: Origin House has an inside scoop into which brands are performing the best.

That insight has led to the company buying several of the best-performing brands in California. Origin House continues to expand its own lineup and expects sales of its own brands to soon contribute around 50% of its total revenue. 

It's important to know that the recreational marijuana market in California is still in its infancy. There are only around 500 licensed dispensaries in the state right now. That number should multiply in the next couple of years.

And while Origin House is rightfully focused primarily on California, the company isn't overlooking other opportunities. It's acquiring 180 Smoke, a leading vape retailer in Canada. This deal should give Origin House a great avenue for selling its own cannabis brands in Canada. The company also intends to expand into other U.S. states down the road, with neighboring Nevada an obvious top destination.

Investment firm Beacon Securities thinks Origin House can generate annual revenue of around $325 million by 2020. With the company's market cap currently below $300 million, there's a lot of room to run for this stock. And if the U.S. changes federal laws to recognize the rights for states to enforce their own marijuana laws (which seems more likely than ever before), I suspect that Origin House's growth could be much greater in the future.

Better marijuana stock

In my view, the Altria deal makes Cronos one of the most attractive Canadian marijuana stocks. Although Origin House is based in Canada, I see it as one of the most promising plays on the U.S. marijuana market.

Granted, each company faces risks. For example, the Canadian recreational marijuana market might not grow as quickly as expected. California could be super slow at licensing new dispensaries. Overall, though, the long-term prospects appear to be good for both Cronos Group and Origin House.

So which is the better marijuana stock? Flip a coin. Or go with both. I expect both Cronos Group and Origin House to continue their winning ways.