What's the hottest pot stock on the planet right now? Sundial Growers (SNDL -4.31%). Its shares have skyrocketed more than 350% this year and were briefly up more than 500%. Investors on Reddit, in particular, have become excited about this once-flailing Canadian cannabis producer.

But as hot as Sundial Growers is right now, I don't think it's the best pick for investors. Here are two cannabis stocks that trounce Sundial in several important ways.

Three cannabis leaves on a line trending upward

Image source: Getty Images.

A ginormous growth gap

Cresco Labs (CRLBF -6.98%) and Green Thumb Industries (GTBIF -9.25%) are both multistate cannabis operators based in Illinois. Revenue growth is the starkest contrast between these companies and Sundial.

In its latest quarter, Sundial reported net revenue of 12.9 million in Canadian dollars (about $10 million), down 36% from the previous quarter and a 54% year-over-year drop. Cresco, on the other hand, generated record revenue of $153 million in the third quarter, a 63% quarter-over-quarter increase and more than six times greater than its result in the prior-year period. Green Thumb posted Q3 revenue of $157.1 million, up 50.2% from Q2 and a 131.1% year-over-year jump. 

The two U.S. companies' bottom lines also look a lot better than their Canadian counterpart's. Sundial recorded a net loss of CA$71.4 million in Q3. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss worsened, from CA$3.9 million in Q2 to CA$4.4 million.

Cresco and Green Thumb, though, were both profitable in the third quarter with improving bottom lines. Cresco's net income in Q3 totaled $4.9 million, compared to losses of $4.7 million and $8.6 million in the previous quarter and prior-year period, respectively. Green Thumb delivered a Q3 profit of $9.6 million. The company posted net losses of $12.9 million and $14.6 million in the previous quarter and prior-year period, respectively.

Brighter prospects

But it's not just past performance that sets Cresco Labs and Green Thumb Industries apart from Sundial Growers. The two U.S. cannabis operators' prospects appear brighter than Sundial's as well.

Granted, Sundial has made some strides that could improve its fortunes. It restructured last year, putting the company on a more solid financial footing. Sundial resolved some cultivation issues that affected its sales in the third quarter. The company added solventless cannabis extracts to diversify its product mix. And the dynamics of the Canadian cannabis market appear to be improving. 

However, there's no question that the opportunities for Cresco and Green Thumb are much more attractive. The cannabis markets in the states where the two companies currently operate continue to grow briskly.

Both Cresco and Green Thumb are expanding into new markets as well. For example, Cresco is moving into Florida's medical cannabis market and recently won a license to sell in Arizona's new recreational marijuana market. Green Thumb is seriously eyeing the new recreational market in New Jersey. 

The potential for major cannabis reform in the U.S. could also provide huge catalysts for both Cresco and Green Thumb. There's a chance that marijuana will be decriminalized at the federal level. This would pave the way for Cresco and Green Thumb to list their shares on the Nasdaq or New York Stock Exchange, opening access to the stocks to many more investors.

Ready to trounce

Cresco Labs and Green Thumb Industries beat Sundial Growers on nearly every front. There's one notable exception: Sundial's stock performance has been much better so far this year (although Cresco's jump of more than 65% and Green Thumb's gain of more than 50% are quite good).

However, Sundial's meteoric rise has been mainly due to a short squeeze. Historically, short-squeeze scenarios don't end well for investors left holding the stock. 

Meanwhile, Cresco and Green Thumb continue delivering strong growth. Both companies have clear and compelling growth drivers for the future as well. I think that these two U.S. stocks are poised to trounce Sundial Growers over the long run.