Cronos Group (NASDAQ:CRON) and MariMed (OTC:MRMD) accomplished something in 2018 that most marijuana stocks didn't: They delivered positive returns. Both stocks crushed the performances of the top marijuana exchange-traded funds (ETFs).

MariMed was, by far, the bigger winner, with its stock skyrocketing 371% compared to Cronos Group's 34% gain. But which of these two high-flying marijuana stocks is the better pick for investors now?

Marijuana growing in a greenhouse

Image source: Getty Images.

The case for Cronos Group

Check out the latest Cronos Group earnings call transcript.

Investors have two primary reasons to buy Cronos Group stock. First, the growth potential for the global marijuana market is enormous. Second, Cronos is in a great position to capitalize on those growth opportunities.

You can divide the global marijuana market into three groups: Canada, countries that have legalized medical marijuana, and the U.S. Cronos Group stands to profit in a major way from at least the first two of the three.

The keys to success for Cronos Group are production capacity and distribution networks. Cronos is already in pretty good shape with capacity. It can currently grow over 40,000 kilograms of cannabis per year. But the combination of joint ventures in Australia, Israel, and especially in Canada should boost Cronos Group's annual production capacity to over 117,000 kilograms.

As for distribution networks, Cronos teamed up with leading U.S. cannabis retailer MedMen to launch retail cannabis stores throughout Canada in provinces where they're allowed. The company is selling recreational cannabis products in four Canadian provinces that are home to over half of the country's total population. In addition, Cronos signed an agreement with Cura to supply a minimum of 20,000 kilograms per year over the next five years.

Internationally, Cronos secured a couple of key supply agreements in Europe. The company partnered with Pohl-Boskamp to supply medical cannabis in Germany. And it teamed up with pharmaceutical wholesaler Delfarma to supply the medical cannabis market in Poland. 

Cronos Group beat out other Canadian marijuana producers to land a big partnership with -- and investment from -- Altria. The tobacco giant invested $1.8 billion in Cronos for a 45% stake and has an option to gain majority control of the company in the future. The relationship with Altria should help Cronos as it builds consumer brands across the world.

Another feather in Cronos Group's cap is its partnership with Ginkgo Bioworks. Cronos licensed Ginkgo's technology for producing high-quality cannabinoids at scale using genetically engineered yeast strains. This process holds the potential to dramatically reduce the costs of cannabinoid production compared to extraction from cannabis plants.

The case for MariMed

MariMed focuses on the one marijuana market where Cronos Group can't compete and retain its listing on the Nasdaq stock exchange -- the U.S. The U.S. claims the biggest marijuana market in the world even though marijuana remains illegal at the federal level. MariMed ranked as the second-best-performing U.S.-based marijuana stock of 2018.

Until recently, MariMed wasn't a marijuana grower itself. The company got its start providing advisory services to businesses in the U.S. cannabis industry. Now, however, MariMed is buying out some of its customers to jump headfirst into the industry.

MariMed hasn't abandoned its advisory business, though. It even acquired BSC Group in October. BSC Group is a New Jersey-based company that offers licensing, consulting and operations management services to U.S. cannabis businesses. 

While MariMed continues its growth in the U.S. marijuana market, there's also a new huge market that the company is now entering. Passage of the 2018 farm bill in December legalized hemp in the U.S. This legislation defined hemp as cannabis that contains no more than 0.3% of psychoactive compound THC. 

MariMed prepared to jump into the hemp CBD market even before the farm bill passed. In October, it invested $30 million in hemp CBD supplier GenCanna. Just a few days ago, MariMed formed a new subsidiary called MariMed Hemp to focus on hemp-derived CBD product branding and distribution.

MariMed CEO Robert Fireman thinks that the U.S. hemp CBD industry could grow even more quickly than the marijuana industry. He's not alone in that view. Market research company Brightfield Group projects that the hemp-based cannabidiol (CBD) market in the U.S. could reach $22 billion by 2022.

Better marijuana stock

I think that MariMed's decision to expand into the hemp CBD market will pay off big time for the company. I'm not sure that Brightfield Group's $22 billion by 2022 prediction will come true, but I have no doubt that the hemp CBD opportunity in the U.S. will be huge. At least for now, MariMed is the better hemp stock.

If you're a stickler about being literal, though, Cronos Group is probably the better marijuana stock. I think the company will generate more growth from marijuana than MariMed will over the next few years.

Now that it's joined at the hip with Altria, my view is that Cronos Group's future is brighter than it's ever been. And that's saying a lot since Cronos is the best-performing marijuana stock of all time.

I wouldn't be surprised if Altria and Cronos decide to enter the U.S. hemp market as well. If that happens, things could get very interesting.