To say there's a difference between Canadian marijuana stocks Tilray Inc. (NASDAQ:TLRY) and Organigram Holdings Inc.(NASDAQOTH:OGRMF) is putting it mildly. The difference really shows up when you look at recent performance. Organigram jumped more than 50% in just the last month. That gain looks paltry, though, when you consider that Tilray has skyrocketed close to 350% in the same period.

But which of these marijuana stocks is the better pick for investors? The arguments for Tilray and Organigram aren't as different as you might think.

The case for Tilray

Why has Tilray's share price soared so much in recent weeks? I suspect one big factor is that the stock trades on the Nasdaq, which makes it more visible and accessible to U.S. investors. Another potential reason behind the stock's huge move is that many people think that Tilray could be a top candidate for major alcoholic beverage-maker Diageo to select as its cannabis partner. I think the more important case for buying Tilray, however, is why it could be under consideration by Diageo.

One likely factor is Tilray's production capacity. The company should have 912,000 square feet of growing space by the end of this year, 230,000 square feet of which is in Tilray's facility in Portugal. With many predicting tremendous demand in Canada once its recreational marijuana market opens next month, capacity will be key.

Speaking of the Canadian recreational marijuana market, Tilray has been very successful in lining up supply agreements with provinces and territories. So far, the company has secured deals with British Columbia, Manitoba, Nova Scotia, Ontario, Quebec, the Yukon Territory, and the Northwest Territories. 

But the global opportunity is the biggest prize dangling before Tilray. The company already exports medical cannabis to 11 countries outside of Canada, including Germany, the largest cannabis market outside of North America. Tilray's international sales accounted for only around 5% of total revenue in the second quarter, but that percentage should increase significantly over time. 

Tilray is also in a solid position financially to continue expanding its capacity and its international operations. The company reported $25.3 million as of the end of June. That figure, however, doesn't include the $163.6 million in net proceeds raised from its initial public offering (IPO). 

The case for Organigram

Organigram's shares aren't available for trading on a U.S. stock exchange. And the company hasn't received as much buzz as Tilray and a few others as a prospect for Diageo or other alcoholic beverage companies. That doesn't mean that Organigram isn't under consideration, though.

The company is also cranking up its production capacity in a major way. While Organigram currently can produce 36,000 kilograms annually, its capacity will jump to 62,000 kilograms within the next eight months. By Q4 of 2019, Organigram expects to boost its annual production capacity to 113,000 kilograms. 

Organigram isn't too far behind Tilray in lining up supply agreements with provinces and territories for the recreational cannabis market. It's already signed deals with Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, and Prince Edward Island. Organigram also hopes to win a supply agreement in the not-too-distant future with Newfoundland.

Like Tilray, Organigram has its eyes on marijuana markets outside of Canada. The company forged a partnership with Alpha-Cannabis Germany in May, a deal that included Organigram buying up to 25% of the German medical cannabis distributor. Organigram also teamed up with Cannatrek Medical to supply medical marijuana in Australia. 

Organigram appears to be in great shape to fund additional expansion efforts. As of May 31, 2018, the company had cash and short-term investments of 156 million Canadian dollars.  

Better marijuana stock

Tilray is certainly the hotter marijuana stock right now compared with Organigram. But is it the better marijuana stock? I don't think so. 

My view is that Tilray has simply become way too expensive. Organigram is practically a value stock when you look at it side by side with Tilray. The biggest knock against Organigram, in my view, is that it isn't as established in international markets as Tilray is. Over the long run, I'm concerned that Organigram could find itself squeezed out by larger rivals. But given the choice between Tilray and Organigram right now, I'd go with Organigram.