It's been a great year for Aurora Cannabis (ACB 3.26%) and Scotts Miracle-Gro Company (SMG 0.86%) so far. Both stocks are up more than 50% year to date. 

How the stocks achieved those gains have been quite different, though. Aurora's share price doubled by mid-March before falling back down to earth a bit. Scotts, meanwhile, rose relatively steadily throughout the year.

Which stock is the better pick for long-term investors? Here are the top arguments for both Aurora and Scotts Miracle-Gro. 

Giant cannabis leaf in a shopping cart

Image source: Getty Images.

The case for Aurora Cannabis

Any discussion about the merits of investing in Aurora Cannabis has to include the company's industry-leading capacity. Aurora currently can grow around 150,000 kilograms of cannabis on an annualized basis. It expects to increase annual production capacity to more than 625,000 kilograms by the end of 2020.

There are two main reasons why Aurora's tremendous production capacity is important. First, the company can sell all it produces right now. The more supply, the more money it makes. Second, Aurora's high capacity from its advanced growing facilities gives the company economies of scale that help it lower costs, thereby improving margins.

Aurora has plenty of outlets for selling the cannabis that it produces. The company claims the second-highest market share in the Canadian adult-use recreational cannabis market. It's a major player in the country's medical cannabis market. And Aurora ranks as the leader in international medical cannabis markets, the most important of which is Germany, where the company has the highest market share.

The company is well positioned to serve the fast-growing global hemp market. Aurora's acquisitions of HempCo, AgroPro, Borela, and ICC Labs give it an unmatched scope of operations in producing and processing hemp products.

While some of its peers have chosen to sell significant stakes to big partners outside of the cannabis industry, Aurora has taken a different path. It brought billionaire investor Nelson Peltz on board as a strategic advisor to help facilitate partnerships with multiple companies in industries including consumer packaged goods and beverages with the goal to not fork over big equity positions. This could pay off for Aurora over the long run as the global cannabis industry expands.

Speaking of that global cannabis industry, Aurora thinks that the total potential market could top $200 billion annually over the long run. Most of this opportunity lies outside of Canada. 

The case for Scotts Miracle-Gro

Scotts Miracle-Gro set out a few years ago to become the leader in supplying key products needed by the cannabis industry, including hydroponics, lighting systems, and ventilation systems. It achieved that goal thanks to a string of acquisitions that dramatically increased the size of the company's Hawthorne Gardening subsidiary.

A big chunk of Hawthorne's business is in California. That's not surprising since the state claims the largest legal marijuana market in the world. But Hawthorne could have new opportunities that together are bigger than California.

Illinois recently legalized recreational pot with the market scheduled to open in 2020. Efforts to legalize recreational use of marijuana in New York and New Jersey have run into hurdles, but both big states could move forward in the not-too-distant future.

While the cannabis market definitely presents great growth prospects for Scotts Miracle-Gro, consumer lawn and garden products still generate most of the company's revenue. In the first quarter of 2019, this business grew by a solid 8% year over year. 

The consumer lawn and garden market is more mature than the cannabis market is so it understandably won't be as significant of a growth opportunity. However, Scotts continues to innovate, launching new products including organic products that are resonating with customers. Scotts CEO Scott Hagedorn noted in the company's Q1 conference call that the biggest growth drivers for its lawn fertilizer business were "products that didn't even exist three years ago."

In addition to these growth opportunities, Scotts Miracle-Gro offers investors a solid dividend that currently yields nearly 2.5%. Don't dismiss the benefit the company's dividend program provides. Over the last five years, Scotts' dividends boosted its total return by more than 50%.

Better buy

Back to our initial question: Which of these two stocks is the better choice for long-term investors? I think the answer depends on your investing style.

If you're a conservative investor, Scotts Miracle-Gro is the better pick. The company has a stable and growing business in its core consumer lawn and garden segment. It offers a faster growth opportunity with Hawthorne's position in the cannabis industry. And Scotts has that nice dividend.

For more aggressive investors, though, Aurora Cannabis could be a good fit for you. If global cannabis markets grow anywhere close to what many think they will, Aurora could deliver massive gains.

Aurora is riskier than Scotts Miracle-Gro because it's a pure-play investment in the cannabis industry. There's also the possibility that Aurora could issue more shares to raise capital and dilute the value of existing shares. But if you have a long-term perspective, Aurora Cannabis just might turn out to be among the bigger winners of the marijuana boom.