Better Marijuana Stock: MariMed vs. Village Farms

There has been a big role reversal for MariMed (NASDAQOTH: MRMD) and Village Farms International (NASDAQ: VFF). In 2018, MariMed ranked as one of the top-performing U.S. marijuana stocks, jumping 371% while Village Farms plunged 47%. So far this year, however, Village Farms is one of the biggest winners, with the stock up more than 270% while MariMed's share price has dropped more than 30%.

Some investors might think that it's about time for the tables to turn once again, with MariMed rebounding and Village Farms giving up some of its big year-to-date gains. Others might feel that the current trends for these two marijuana stocks will continue.

Which of these two stocks is actually the better pick for long-term investors? Here's what you need to know to decide between MariMed and Village Farms.

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The case for MariMed

Probably the best argument for buying MariMed stock is that the company is growing rapidly, with tremendous opportunities for that growth to accelerate. MariMed reported first-quarter year-over-year revenue growth of 69%. The company's adjusted EBITDA increased by 76% over the prior-year period.

But it's MariMed's opportunities for even more growth that will likely be more intriguing to investors. The company started out offering advisory services to medical cannabis operators. Now, though, MariMed is buying up its clients to become one of the largest multistate cannabis operators in the U.S.

When its transition is completed, MariMed will manage medical cannabis operations in Massachusetts, Illinois, Nevada, and Maryland. MariMed has already received approval from the state of Massachusetts to acquire one of its clients, ARL Healthcare, and awaits state approval in the other three states to complete the transfer of ownership of the clients' businesses that it is buying.

With these transactions likely to finalize over the next few months, MariMed should see its revenue skyrocket. The company also hopes to add fuel to the fire through its entry into the U.S. hemp cannabidiol (CBD) market.

MariMed claims a significant stake in GenCanna Global, one of the largest producers of CBD products in the U.S. that comply with Good Manufacturing Process (GMP) guidelines. The company also established a new subsidiary, aptly named MariMed Hemp, to focus on the U.S. hemp CBD market. 

MariMed CEO Bob Fireman thinks his company is now "a significant early mover in the burgeoning CBD health and wellness market." Cannabis market researcher Brightfield Group predicts that the U.S. hemp CBD market will soar to $22 billion by 2022. While other estimates aren't that optimistic, there is certainly a big opportunity. 

The case for Village Farms

A few years ago, Village Farms focused on growing greenhouse produce such as cucumbers, peppers, and tomatoes. Thanks to its partnership with Emerald Health Therapeutics (NASDAQOTH: EMHTF), however, Village Farms today ranks as an up-and-coming player in the Canadian cannabis market.

In 2017, Village Farms and Emerald formed a joint venture named Pure Sunfarms. Village Farms' contribution to the joint venture was a 1.1 million-square-foot greenhouse in Delta, British Columbia, that could be converted to growing cannabis. That conversion has been completed with the Delta greenhouse now fully operational to produce cannabis.