The cannabis industry's explosive growth is a great reason to invest in pot stocks. In 2019, the size of the legal cannabis market in the U.S. was $12.2 billion. By 2024, that number is expected to reach $31.1 billion, with the industry sporting a compound annual growth rate (CAGR) of more than 20% over that period.

Cannabis companies will only get larger as the industry grows, and that's why getting in on the action today could set you up for some great returns later on. Two stocks that could provide awesome growth sooner rather than later are GrowGeneration (GRWG 6.01%) and Curaleaf (CURLF -0.55%). Here's a closer look at why both of these stocks could double in as little as one year.

Marijuana leaves

Image source: Getty Images.

1. GrowGeneration

GrowGeneration isn't a pot producer, but that doesn't mean it can't benefit from the industry's rapid growth. The stock is a pick-and-shovel play that provides industry players with the tools they need to grow cannabis. GrowGeneration's hydroponics and gardening products facilitate the cultivation process. Using a combination of tubes, pumps, and sprays, hydroponics systems make it easy to grow cannabis in a small space and without the need for soil. GrowGeneration is still in its early growth stages and has many more potential customers.

On Aug. 13, the company released its second-quarter numbers for the period ended June 30. The results showed record sales of $43.5 million, which rose 123% year over year. Net income of $2.6 million was also up more than double the $1.1 million GrowGeneration reported in the prior-year period.

And the company is still growing and acquiring businesses. On Oct. 12, it announced it was acquiring Hydroponics Depot, which is based in Phoenix, Arizona. Arizona is one of four states that has the legalization of recreational marijuana on the ballot in November -- the other three states are South Dakota, Montana, and New Jersey. Then, on Oct. 20, the company announced it was buying Big Green Tomato, a hydroponics equipment chain with two locations in Michigan. Research company MarketsandMarkets estimates that the market for hydroponics systems will rise to $16.6 billion in 2025, growing at an average annual rate of 11.9% until then.

Shares of GrowGeneration are up 300% since Jan. 1, in a year during which many pot stocks haven't fared all that well, as illustrated by the Horizons Marijuana Life Sciences ETF (HMLSF 3.48%), which is down more than 30%. Doubling in 2021 may not be all that difficult for GrowGeneration, especially if more states legalize pot and the company continues its smart expansion across the country.

2. Curaleaf

Curaleaf is another exciting growth opportunity for cannabis investors. The Massachusetts-based company has also been busy acquiring companies. In February, it closed on its acquisition of Cura Partners, giving Curaleaf a greater presence on the West Coast by adding the popular Select brand to its portfolio. In July, Curaleaf grew even bigger, referring to itself as the world's largest cannabis company in terms of revenue after completing the purchase of multistate operator Grassroots, which grew the company's presence from 18 states to 23.

Curaleaf remains committed to growing its business, and on Oct. 29 it announced that it would be moving the Select brand into yet another new market -- Illinois. Earlier in the month, it announced the brand would be expanding into Ohio; in September, it launched in New York.

The company's been aggressive when it comes to growth, which is why if there are more markets available for Curaleaf to expand into, you can be sure they'll be on its radar. In August, for example, the company expanded into Utah with its first retail location there, having obtained a license in 2019. The state legalized medical marijuana only two years ago.

All of Curaleaf's growth efforts are easily visible from its earnings reports. When it released its second-quarter results on Aug. 17, its sales of $117.5 million had grown 142% year over year. But if you're counting its pending acquisitions at the time, the company's pro forma sales would've come in at $165.4 million. What's also encouraging is that as Curaleaf grows, its losses aren't getting bigger. In Q2, its net loss of $2 million was just a fraction of the $24.5 million loss the company incurred in the same period last year.

With lots of growth on the horizon and Curaleaf's bottom line improving, there's a lot to like about where this company is headed. This year, its shares are up over 45%, well above the Horizons Marijuana Life Science ETF but still short of GrowGeneration's gains.

Which stock is the better buy?

Both of these stocks have the potential to double in value in 2021, especially as more states permit cannabis use. But in terms of which one's the safer bet and a better buy, let's first look at their respective price-to-sales (P/S) ratios, which is helpful when assessing companies that aren't yet profitable (like Curaleaf):

CURLF PS Ratio Chart

CURLF PS Ratio data by YCharts

Investors are paying more of a premium for Curaleaf, giving GrowGeneration's stock a bit of an advantage in terms of price. And from a risk perspective, the hydroponics company is also a safer buy overall, and therefore, it's the pot stock I'd go with today if I had to pick one. Unlike Curaleaf, a company which needs to worry about the quality of its crops, managing cultivation sites, and ensuring that its business process is efficient from manufacturing to distribution, GrowGeneration is just providing tools for the industry and doesn't face the same challenges as a hands-on pure-player.