If you're looking for ways to profit from growth in the U.S. cannabis industry, there are two stocks that definitely belong on your list to evaluate. MariMed (MRMD 0.96%) ranked as one of the top pot stocks of 2018 with a 371% gain, although it hasn't performed well so far this year. Innovative Industrial Properties (IIPR -0.36%), on the other hand, jumped 40% last year and has more than doubled year to date in 2019.

Which of these stocks is the better pick for long-term investors now? Here's how MariMed and Innovative Industrial Properties stack up against each other.

Cannabis in a greenhouse

Image source: Getty Images.

The case for MariMed

MariMed started out providing advisory services to the cannabis industry. But the company soon figured out that it could be even more successful by practicing what it preached to clients. MariMed set out to buy its clients and become a cannabis and hemp operator itself instead of only being an advisor.

That approach seems to have paid off so far. MariMed reported record revenue of $25.7 million in the second quarter, a 774% year-over-year increase. The company also posted a profit of $4.7 million.

MariMed currently operates cannabis dispensaries in six states, including its home state of Massachusetts. The company's core cannabis business continues to grow, with MariMed announcing Q2 cannabis sales of $3.7 million.

You don't have to be a math whiz to realize that MariMed is making most of its revenue in an area other than cannabis. The company's hemp-derived cannabidiol (CBD) subsidiary has been a big winner for MariMed. This business delivered its first sales of hemp seeds to GenCanna Global in the second quarter, recognizing $22 million in the quarter of a total sale of $25.2 million. MariMed Hemp also sold another $8 million of hemp seed to GenCanna after the end of the second quarter.

Hemp CBD could be the best path to future growth for MariMed. It owns roughly one-third of GenCanna and stands to profit as the Kentucky-based hemp CBD company goes public in the not-too-distant future. MariMed also could prosper by serving the hemp CBD industry in other ways. For example, it recently signed a deal with an unnamed "major beverage distributor in the northeastern U.S." to market its CBD products in two states.

However, cannabis remains a key growth opportunity for MariMed as well. The company's second-largest cannabis grow facility in Massachusetts recently received an important regulatory approval. MariMed also anticipates additional transfers of licenses from its acquired operations as it receives state approvals.

The case for Innovative Industrial Properties

Innovative Industrial Properties (IIP) isn't a cannabis operator. The company doesn't handle cannabis at all, which allows its shares to trade on the New York Stock Exchange since IIP isn't violating any federal laws. IIP is a real estate investment trust (REIT) that focuses on leasing properties to medical cannabis operators.

The company's business model has been tremendously successful. IIP now owns 31 properties in 12 states with a total of 2.2 million rental square feet. And every bit of that square footage is leased out, with a weighted-average remaining lease term of nearly 16 years.

IIP reported net rental revenue of $8.28 million in the second quarter, an impressive 155% year-over-year jump. It also announced earnings of a little over $3 million, extended a streak of profitability that began in 2017. This positive financial performance is a direct result of IIP's aggressive strategy to plow cash back into new properties to lease out.

The company's growth isn't likely to slow down. Subsequent to the end of the second quarter, IIP acquired additional properties in California and Illinois that were promptly leased out to cannabis operators. IIP also expanded its relationship with PharmaCann, which is being acquired by large cannabis retailer MedMen (MMNFF).

Several of the states where IIP currently operates are only in the early stages of their legal cannabis markets. And there are another 21 states where medical cannabis is legal that IIP isn't in yet.

As a REIT, IIP must distribute at least 90% of its taxable income to shareholders as dividends. This is another big plus for investors interested in the stock, with IIP's dividend currently yielding nearly 3.3%.

Better cannabis stock

Although MariMed could have solid growth prospects, I think that Innovative Industrial Properties is the better cannabis stock right now. IIP has a "rinse-and-repeat" business model where it should easily be able to continue its remarkable growth by investing in new properties.

Investing in marijuana stocks isn't for the faint of heart, with the intense volatility and high level of risk. But in my view, IIP presents one of the more attractive alternatives for profiting from growth in the U.S. cannabis industry. I think the stock should keep up its winning ways.