You won't find too many hotter marijuana stocks right now than HEXO (HEXO) and The Green Organic Dutchman (TGOD.F -9.88%). HEXO has skyrocketed a whopping 125% so far this year, while The Green Organic Dutchman (TGOD) has soared nearly 80%.

But which of these stocks is the better pick for investors over the long run? Here's what you need to know about HEXO and TGOD.

Shadow of a dollar sign on top of a pile of marijuana leaves

Image source: Getty Images.

The case for HEXO

At least one Wall Street analyst thinks that HEXO is the best marijuana stock on the market right now. Bank of America's Christopher Carey recently initiated coverage on HEXO with a price target that reflected a 40% premium over the then-current share price. The reasons for Carey's enthusiasm about HEXO make a pretty strong argument for buying the stock.

First of all, Carey really likes HEXO's low valuation. You might scratch your head over this, considering that the marijuana producer's market cap stands north of $1.6 billion while HEXO's revenue over the last 12 months was well under $10 million.

But compared to many of its peers, HEXO does appear to be attractively valued. The company is on track to have an annual production capacity of around 150,000 kilograms with its acquisition of Newstrike Brands. Based on sheer bang for the buck, HEXO's price tag seems pretty reasonable versus many others in the cannabis industry.

Another big plus for HEXO is its long-term supply agreement with Quebec for adult-use recreational marijuana. This deal gives HEXO a market share in the province of at least 30% over the next few years.

Then there's HEXO's partnership with Molson Coors Brewing (NYSE: TAP). The giant beermaker tapped HEXO as its cannabis partner in 2018 to form a joint venture to develop cannabis-infused beverages in Canada. The Canadian market for cannabis beverages and edibles is expected to open later this year.

Put all of this together, and you've got an up-and-coming marijuana stock that could have plenty of room to run.

The case for The Green Organic Dutchman

The Green Organic Dutchman has been feeling some love from analysts, too. Jefferies especially likes the company's focus on organic products and thinks the stock could soar more than 40% from its current level.

This focus on organics is an important differentiator. Surveys have found that 61% of medical cannabis users and 50% of adult-use recreational cannabis users prefer organic cannabis. Organic products can also command higher prices and profit margins.

And if you want to talk about valuation, TGOD could turn your head a bit. The company's market cap is just a hair over $900 million. TGOD thinks that its annualized production run rate will increase to 219,000 kilograms of cannabis by late 2020. That's enough to land the company a spot in the top five marijuana producers based on capacity. It also makes TGOD's market cap look even more attractive. 

TGOD doesn't have as impressive of a supply agreement as HEXO does in Quebec. But it does have a supply deal with Canada's largest province, Ontario. In addition, the company signed a distribution agreement with Philippe Dandurand Wines' Velvet Management. Philippe Dandurand is the largest wine distributor in Canada.

The marijuana producer is also taking solid steps to expand internationally. TGOD has joint ventures in Mexico and Denmark. It bought a 49% stake in Jamaican cannabis company Epican. Perhaps most importantly, the company acquired HemPoland, the first company in Poland to receive a license to grow hemp and produce organic CBD products. With the European CBD market growing fast, HemPoland gives TGOD a launching pad for significant growth.

Better marijuana stock

Both of these stocks have some good things going. But I think the advantage goes to HEXO. I like the company's virtually guaranteed strong market share in Quebec. I also expect that HEXO's partnership with Molson Coors will pay off when the cannabis beverages market opens in Canada.

However, my chief worry with HEXO is that it's late to the party in establishing international operations. I'm also concerned that more stock offerings could dilute the value of existing shares even more than has already been done. While I like HEXO over TGOD, I continue to think that there are better marijuana stocks to buy for the long run than either of these two stocks.