Aurora Cannabis (ACB -6.04%) is off to a fantastic start in 2019. Its share price is up more than 55%. But there's a marijuana stock with a market cap less than one-third of Aurora's that is enjoying an even better start to the year. That stock is Green Thumb Industries (GTBIF -3.86%), which is up close to 70% year to date.

Which of these two marijuana stocks is the better pick for investors now? Here's how Aurora Cannabis and Green Thumb Industries stack up against each other.

Marijuana growing in a greenhouse.

Image source: Getty Images.

The case for Aurora Cannabis

Aurora Cannabis didn't start off as the biggest marijuana grower. The company gobbled up marijuana producers left and right over the last few years. But this frenzy of acquisitions has given Aurora the highest projected production capacity in the industry. And capacity is critical for success in the global cannabis market.

The company already can produce around 120,000 kilograms of cannabis on an annual basis. Aurora expects its capacity to increase to more than 150,000 kilograms by the end of this month. And it's on track for an annual production capacity topping 500,000 kilograms.

Aurora Cannabis also has customers willing to buy its products. The company claimed a market share of 20% in the Canadian recreational marijuana market in the quarter ending Dec. 31, 2018. Aurora's distribution network for recreational pot covers roughly 98% of the Canadian population. 

The company should enjoy fast-rising sales as Canada's recreational marijuana market matures. Aurora also eagerly awaits the anticipated finalization of regulations for cannabis beverages, edibles, and concentrates in Canada later this year.

International medical marijuana markets should present an even bigger opportunity for Aurora over the long run. Aurora Cannabis CEO Terry Booth said in the company's Q2 earnings release that Aurora is maintaining its "market leadership in Germany and other key international markets." The company is active in 24 countries spanning five continents.

Although Aurora Cannabis isn't consistently profitable yet, the company appears to have a solid path to profitability. Aurora's tremendous scale of operations should allow it to drive down production costs. Its focus on higher-margin products should also pay off over the next year.

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

The case for Green Thumb Industries

Green Thumb Industries (GTI) doesn't operate in Canada like Aurora Cannabis does. It doesn't have operations in Germany or Latin America, either. Instead, GTI focuses on the one market where Aurora can't compete: the U.S. And it happens to be the biggest legal cannabis market in the world.

Currently, GTI has operations in 11 states that have a combined population of 146 million people. These states include California, Florida, and Massachusetts, all of which either already have or are projected to have annual marijuana markets of at least $1 billion by 2022.

GTI's home state of Illinois could also be headed toward legalizing recreational marijuana. Gov. J.B. Pritzker was elected in November 2018 and committed to pushing for recreational pot legalization. A recent study projected that Illinois could generate annual recreational marijuana sales of more than $2 billion in the future.

One key plus for GTI is that it's diversified across the cannabis supply chain. The company has 13 production facilities. It holds licenses for 83 retail cannabis locations and currently operates 17 retail cannabis stores. GTI markets six cannabis brands and is likely to continue expanding its product offerings.

Like Aurora Cannabis, GTI isn't consistently profitable yet. The company's operating expenses have risen faster than its revenue has as GTI focused on expansion. However, as the marijuana markets in the states where it operates mature, GTI should be able to reach profitability. 

Better marijuana stock

I think that one of these two marijuana stocks has a bigger opportunity and a more attractive valuation than the other. Which stock is it? Green Thumbs Industries.

It's possible that Aurora Cannabis could someday enter the U.S. marijuana market. Until that day comes, though, GTI has a larger market opportunity before it. GTI stock is also less expensive than Aurora Cannabis is, based on historical sales levels.

The biggest issue for GTI is that marijuana remains illegal at the federal level in the U.S. That's also what is preventing Aurora from jumping into the U.S. market. However, I think the chances that GTI's business could be disrupted as a result of enforcement of federal laws are lower than ever. Support is also growing for changing federal marijuana laws. If and when that happens, my view is that GTI is likely to be one of the biggest winners.