The investing world has been full of fascinating storylines in the past few months, one of which has been the rise of so-called meme stocks. Many of these securities have doubled or tripled (or more) in value this year, often for reasons entirely unrelated to their operations. Therein lies the danger of these stocks, however. Take AMC Entertainment, which is up by more than 2,500% year to date. The movie theater operator got crushed last year as the pandemic severely harmed its business. 

A comeback could be in the making, but it is still much too early to bet on this struggling business. The same could be said of GameStop, another popular meme stock whose shares have skyrocketed by more than 1,000% year to date. Investors seeking stocks that look positioned to perform well in the long run should look elsewhere. Below are two securities that are much better options than (most) meme stocks. 

A person standing at a counter in a cannabis store putting cannabis flower on a scale.

Image source: Getty Images.

1. Cresco Labs

The marijuana industry has been hitting a high note lately. During the 2020 U.S. presidential elections, voters in New Jersey, Arizona, Montana, South Dakota, and Mississippi elected to make recreational and/or medical use of cannabis legal. The state of New York also made recreational pot legal this year. There are 16 states (and the District of Columbia) where recreational cannabis is legal, and 36 where medical marijuana has been given the green light.

Among all the multistate dispensary operators in the U.S., few have as wide a presence as Cresco Labs (TCNNF -3.66%). The company owns 33 retail operations in 10 states, including many of the most populated, such as California, Florida, and New York. Meanwhile, it boasts a market-leading presence in both Pennsylvania and Illinois.

Cresco Labs has generally produced stellar financial results, and it did so again during the first quarter of 2021, which ended on March 31. The pot company's revenue of $178.4 million soared by 168.8% year over year. Gross profit of 48.8% was also much better than the 35.5% reported during the year-ago period. Like many cannabis companies, Cresco Labs isn't profitable, but its net loss decreased to $24.1 million during the first quarter, compared with a net loss of $35.5 million reported during the first quarter of the previous fiscal year.

Importantly, the company attributed its organic revenue growth to increased production capacity and increased dispensary sales. And these trends will likely continue to push the company forward. Cresco Labs expects an annualized revenue run rate of $1 billion by the end of 2021. Few cannabis companies boast sales comparable to that.

Cresco Labs will profit from the continued growth of the U.S. legal cannabis market in the long run, even amid strong competition from illicit sales of the substance. According to research firm BDS Analytics, the U.S. legal pot market will be worth $41.3 billion by 2026, up from $12.1 billion in 2019. Investors can bet on Cresco Labs to grow along with its sector, thanks to its wide presence across the U.S.

Small boxes on a laptop keyboard.

Image source: Getty Images.

2. MercadoLibre

MercadoLibre (MELI -1.18%) operates the leading e-commerce platform in South America. Amid the coronavirus pandemic and subsequent stay-at-home orders, it isn't surprising that business has been booming for the company. MercadoLibre's stock is up by 62.8% in the past 12 months -- even after a major pullback earlier this year. The S&P 500 is up by 42.6% in the same period. 

MercadoLibre posted another strong performance in the first quarter, with the tech company delivering solid growth across the board. Overall revenue was up 111.4% year over year to $1.4 billion. Meanwhile, gross merchandise volume (GMV) grew 77.4% to $6.1 billion. Gross profit jumped by 89.1% to $591.4 million. 

MercadoLibre is poised to continue posting robust growth for many years to come. One major reason to be optimistic about the company's future is that, while it is primarily known for its e-commerce business (and with good reason), MercadoLibre actually boasts a strong ecosystem of inter-related services. For instance, its payment platform, MercadoPago, is the leading such platform in South America, helping to facilitate secure financial transactions on and off the company's marketplace.

Then there is MercadoCredito, which provides credit services to sellers on its platform, and MercadoShops, which offers storefronts to merchants on its platform. This entire suite of services grants MercadoLibre's business high switching costs, meaning sellers on its platform are unlikely to jump ship once they have already set up shop using the tech giant's offerings.

MercadoLibre also benefits from the network effect -- that is, the value of its services increases as more people use them. These factors will help MercadoLibre maintain its dominance in South America and increase its penetration beyond its three largest markets: Brazil, Argentina, and Mexico. Even after soundly beating the market over the past two decades, the tech company may be just getting started.