The past six months have been an absolute whirlwind for the marijuana industry. In October, we witnessed the industry gain the legitimacy it's sought for so long after Canada became the first industrialized country in the world to legalize recreational cannabis. Then, just weeks later, the U.S. midterm elections increased the number of states to have given the green light to medical cannabis to 33. A month later, President Trump signed the Farm Bill into law, legalizing hemp and hemp-derived cannabidiol products. At seemingly every turn, the outlook for the cannabis industry has been improving.

However, this is also a nascent industry -- at least from a legal perspective. With dozens of cannabis growers -- some public, some private -- duking it out for market share, differentiation has been difficult. Some growers have been able to stand out because of their peak production potential, while others have thrust themselves onto investors' radars by announcing a brand-name partnership. Ultimately, though, it's operating margins that'll separate the winners from the wannabes.

An up-close view of a flowering cannabis plant in an indoor setting.

Image source: Getty Images.

These pot stocks know how to grow

One of the most direct margin comparisons investors can make is by examining a pot grower's yield per square foot. Generally speaking, growers that offer an above-average yield should generate better margins than their peers. While not all growers are necessarily forthcoming with their growing capacity square footage or peak annual production estimates, four marijuana stocks stand out as being on track to be well above the industry average of 100 grams of yield per square foot of growing space.

Check out the latest earnings call transcripts for the companies we cover.

Flowr Corp.: 300 to 450 grams per square foot

At the top of the mountain, overlooking all other cannabis growers, is small-cap Flowr Corp. (OTC:FLWPF), which I doubt most investors have heard of and even fewer would guess leads the pack in crop yield. According to a previous investor presentation from Flowr, the company expects to produce up to 60,000 kilograms of peak output annually by 2021, with the company netting 300 to 450 grams per square foot at its Kelowna campus in British Columbia.

What's particularly exciting about Flowr is that it's chosen to focus on ultra-premium cannabis production. There's not a lot of competition for extremely high-grade cannabis, which is a plus. Additionally, premium pot comes with a considerably higher price point, which, when combined with its superior yield per square foot, should result in some very impressive operating margins, once at full capacity.

While not profitable at the moment with a current run rate of 5,000 kilograms per year, it's a pot stock worth keeping a close eye on.

A clear jar packed with cannabis buds that's lying atop a fanned stack of twenty dollar bills.

Image source: Getty Images.

OrganiGram Holdings: 230 grams per square foot

OrganiGram Holdings (NASDAQ:OGI), the only major Atlantic-based grower, should also dazzle in terms of yield per square foot. The company's CEO, Greg Engel, has been guiding investors to expect 113,000 kilograms of peak annual production. But this output will be generated from the company's Moncton campus in New Brunswick, which spans just 490,000 square feet. That's about 230 grams per square foot, or well over double the industry average.

One of the key reasons the company is able to outproduce its peers is its greenhouse setup. OrganiGram employs a three-tiered growing system, which helps maximize its 490,000 square feet of growing space. When combined with the fact that, unlike most top-tier producers, OrganiGram is only operating out of its Moncton campus and doesn't have other grow sites in Canada, the company is able to keep its supply chain costs down while its yields are substantially higher than other growers. That's an excellent combination for healthy profits.

Perhaps it comes as no surprise that OrganiGram's forward price-to-earnings ratio of 23 is among the lowest in the marijuana industry.

Clear jars filled with cannabis buds that are lined up on a counter.

Image source: Getty Images.

Aurora Cannabis: 125 grams per square foot

You might also be surprised to learn that the largest projected producer in Canada, Aurora Cannabis (NASDAQ:ACB), may also be one of the highest-yielding growers per square foot. Aurora, which has grown organically, inorganically, and via partnerships, could deliver 700,000 kilograms in peak annual output by 2021 or 2022, according to my calculations.

Admittedly, getting a complete picture of Aurora's square footage is difficult because of its numerous acquisitions and its presence in two dozen countries. However, what few organic projects we do have specifics on, the company has consistently projected output per square foot that would be nicely above the industry average. For example, the 800,000-square-foot Aurora Sky facility is expected to produce at least 100,000 kilos a year, or about 125 grams per square foot. Meanwhile, the Aurora Sun facility, which is under construction in Medicine Hat, Alberta, should produce 150,000 kilos over roughly 1.2 million square feet (i.e., the same yield as Aurora Sky).

Aurora's secret sauce appears to be its wholly owned subsidiary Larssen, which designs and constructs greenhouses. Larssen's knowledge of the industry will be paramount to Aurora Cannabis achieving superior crop yields.

An indoor cannabis growing greenhouse.

Image source: Getty Images.

The Supreme Cannabis Company: 114 grams per square foot

Last, but certainly not least, is The Supreme Cannabis Company (OTC:SPRWF). Supreme Cannabis is leaning on its premium recreational brand known as 7Acres to drive growth. This is a brand that features a generally higher tetrahydrocannabinol (THC) potency than most growers -- THC is the cannabinoid that gets a user high -- which in turn should lead to higher per-gram sales prices to consumers and in the wholesale market.

According to Supreme Cannabis, the company's 440,000-square-foot 7Acres facility, which should be complete this month, will yield at least 50,000 kilos of premium pot on an annual peak basis. That's a yield of 114 grams per square foot, or about 14% above the industry average. These sort of "junior growers" in the range of 40,000 to 60,000 kilos that are using genetics to focus on premium product, branding, and yield could be surprisingly profitable and are thus worth watching very closely. 

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.