You might think that the fact that OrganiGram Holdings (NASDAQ:OGI) and GW Pharmaceuticals (NASDAQ:GWPH) are both cannabis stocks is about the only thing the two have in common. OrganiGram is an up-and-coming Canadian cannabis producer while GW is a leading cannabis-focused biotech.

But both stocks do have at least one other similarity: They're sizzling hot. OrganiGram and GW Pharmaceuticals shares have skyrocketed more than 70% so far this year. Which of these two cannabis stocks is the better pick going forward? Here's what you need to know.

Giant cannabis leaf in a shopping cart

Image source: Getty Images.

The case for OrganiGram Holdings

There are two key things investors look for with any stock they're considering buying. First, they want great growth prospects. Second, they want the company to be in a strong position to capitalize on those growth prospects. OrganiGram looks good on both counts.

As for growth prospects, it makes sense to start in OrganiGram's home country of Canada. The Canadian adult-use recreational marijuana market is still just getting cranked up after launching last October. This market could easily top $5 billion by 2022, including the additional opportunity for cannabis edibles and other derivatives that should be available for sale later this year.

Even greater opportunities lie outside of Canada. Multiple European countries have legalized cannabidiol (CBD) and/or medical cannabis. Market researcher Brightfield Group projects that the European CBD and medical cannabis market will approach $10 billion by 2023. In addition, other countries across the world have legalized medical cannabis.

So, how well is OrganiGram equipped to seize these opportunities? The company is one of only four cannabis producers to secure supply agreements with all 10 Canadian provinces. OrganiGram is focusing on getting cannabis edibles and vape products ready for the Canadian market with several partners.

It's also well positioned in Europe. OrganiGram teamed up with Alpha-cannabis to target the important German medical cannabis market. The company partnered with Eviana to obtain hemp-derived CBD to supply to key European markets.

Of course, to meet the needs for these markets requires significant production capacity. OrganiGram ranks in the top 10 Canadian cannabis producers based on annual production capacity, with its expansion efforts putting it on track to produce 113,000 kilograms of cannabis per year by the end of 2019. 

The case for GW Pharmaceuticals

GW Pharmaceuticals' fortunes rest primarily on a single CBD drug -- Epidiolex. The biotech won FDA approval last year for Epidiolex in treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), both of which are rare forms of epilepsy.

Epidiolex has proven to be a spectacular commercial success so far. GW reported first-quarter sales of the drug totaling $33.5 million, more than double the amount that analysts expected. The company expects the momentum to continue in the U.S. It also hopes to win regulatory approval in Europe soon.

Analysts have differing views on just how high Epidiolex can fly. Bank of America analyst Tazeen Ahmad thinks the drug will reach peak sales of $2.4 billion. Others project peak sales closer to $1 billion. Epidiolex certainly appears to be on track to becoming a blockbuster for GW Pharmaceuticals. 

The drug's sales could receive a boost if GW wins approvals for additional indications. GW plans to submit for FDA approval in the fourth quarter for Epidiolex in treating seizures associated with tuberous sclerosis complex (TSC). The company also is evaluating Epidiolex in treating Rett syndrome, a disease that causes seizures and can impact coordination and speech.

While Epidiolex deservedly gets the greatest amount of attention, GW also has another drug on the market outside of the U.S. Sativex is approved in over 25 countries as a treatment for multiple sclerosis spasticity. GW is moving forward with a late-stage study of the drug in hopes of winning U.S. approval in the indication. 

In addition, GW Pharmaceuticals' pipeline includes other promising earlier-stage clinical programs. The company is evaluating cannabidivarin (CBDV), another cannabinoid found in the cannabis plant, in treating epilepsy and autism spectrum disorders. GW is also exploring the use of cannabinoids in treating glioblastoma, schizophrenia, and neonatal hypoxic-ischemic encephalopathy (HIE), a brain dysfunction that occurs when the brain doesn't receive enough oxygen. 

Better cannabis stock

My view is that OrganiGram is a better pick right now. Although I like the prospects for Epidiolex, they're already largely baked into GW Pharmaceuticals' share price. OrganiGram, on the other hand, currently has a market cap below $1 billion. Success in Canada and Europe should provide plenty of room to run for the stock.

I also think that OrganiGram has a shot at landing a major partner outside of the cannabis industry. If this happens, OrganiGram's shares would almost certainly soar.

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.