Many investors have jumped on the marijuana stock bandwagon. But there's a different form of cannabis that could be an even bigger story right now. The U.S. legalization of hemp, which is cannabis that contains very low levels of psychoactive ingredient THC, has opened the door for a potentially huge hemp-cased cannabidiol (CBD) market.

Two stocks that hope to become big winners in this hemp market are Medical Marijuana (MJNA) and CV Sciences (CVSI -5.14%). CV Sciences has performed a lot better than Medical Marijuana has, with its share price skyrocketing nearly 600% last year compared with Medical Marijuana's 50% plunge. But which of these stocks is the better pick now?

Hemp leaves with a bottle of CBD oil and dropper on top of them.

Image source: Getty Images.

The case for Medical Marijuana

Medical Marijuana became the first publicly traded cannabis company in the U.S. in 2009. The company's name is a bit of a misnomer since Medical Marijuana doesn't market any products made from marijuana. However, Medical Marijuana has produced and sold hemp-based products for several years.

The company markets a broad lineup of hemp-based CBD products, including dietary supplements, skin care products, and prescription medications. Medical Marijuana also sells hemp-based CBD supplements for pets and hemp animal bedding and litter products through its wholly owned Phyto Animal Health subsidiary.

While Medical Marijuana is based in the U.S., the company targets international markets as well. It operates subsidiaries in Europe, Mexico, and Brazil, where the company became the first to introduce a medical cannabis product, in 2014.

Medical Marijuana also owns significant stakes in several related businesses. It owns 50% of CanChew Biotechnologies, which develops cannabis chewing gum products that target the treatment of pain and other medical disorders. The company has a 33% stake in KannaLife Sciences, which is researching experimental cannabinoid drugs focused primarily on neurological disorders. Medical Marijuana also owns 43% of Axim Biotechnologies, another biotech that's developing cannabinoid drugs. 

The company generated more than $50 million in revenue over the last 12 months, with revenue steadily growing throughout 2018. Much of this growth stemmed from sales of Medical Marijuana's Real Scientific Hemp Oil (RSHO) products. The legalization of hemp in the U.S. should open more opportunities for the company's products as hemp-based CBD becomes more mainstream. 

The case for CV Sciences

CV Sciences was established in 2012 and has grown rapidly since then. The company now ranks as the No. 2 hemp-based CBD retailer. Its PlusCBD Oil is the best-selling hemp CBD product in the U.S. market. 

There are currently over 50 different stock keeping units (SKUs) for CV Sciences' PlusCBD Oil, reflecting the wide variety of formulas and package sizes sold by the company. Well over 2,000 retail stores carry its products on their shelves. 

CV Sciences' revenue continues to skyrocket. During the first three quarters of 2018, the company posted record sales of $34 million. That figure reflected a whopping 153% jump over the prior-year period.  

Although hemp CBD products for consumers is CV Sciences' primary business, the company also has a division focused on developing cannabinoid drugs. CV Sciences is conducting preclinical testing on lead candidate CVSI-007, a combination of CBD and nicotine intended to help individuals reduce their dependence on smokeless tobacco products.

CV Sciences hopes to win FDA approval for CVSI-007 through the 505(b)(2) regulatory pathway, which provides a faster process than normal drug approvals by using data from an already-approved drug. Two smoking cessation products have received FDA approval, but there aren't any approved drugs for smokeless tobacco use and addiction.

Better buy

The decision between these two hemp stocks is an easy one, in my opinion. CV Sciences is already profitable. Its revenue is growing much faster than Medical Marijuana. I don't think it's surprising at all that CV Sciences stock's performance has trounced Medical Marijuana's stock performance. CV Sciences is the clear winner.

There are risks for CV Sciences, though. It's possible that the hemp CBD market won't take off as much as some expect. The market could also become crowded with multiple players, including some with deeper pockets than CV Sciences has. However, I still view CV Sciences as one of the top ways to profit from U.S. hemp legalization

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