Marijuana stocks have picked up a strong tailwind in recent weeks, and investors are trying to decide which pot companies might be the best buys today.

Let’s take a look at Canopy Growth(TSX:WEED)(NYSE:CGC) and HEXO (TSX:HEXO)to see if one should be in your portfolio right now.

Canopy Growth

A wave of positive news combined with a broad-based recovery in the equity markets has taken Canopy Growth from $36 per share in late December to the current price above $57. This has investors wondering if the rally will take the stock back to the 2018 high around $76 or simply fizzle out.

The company is covering all the angles as it positions itself to lead the global cannabis industry. Canopy Growth is the top player in the Canadian medical marijuana space and is expected to capture a significant part of emerging medical marijuana markets, including Europe. In fact, Canopy Growth already has a pharmaceutical distribution business in Germany and is investing hundreds of million of dollars to construct production facilities in the region. The company also just announced it has entered the U.K. and Poland.

On the recreational side, Canopy Growth is developing cannabis-infused beverages with its partner Constellation Brands. The American beer, wine, and spirits giant owns a 38% position in Canopy Growth and it wouldn’t be a surprise to see the company eventually take a controlling interest.

In the U.S., Canopy Growth just received a licence to process hemp in New York. The announcement is viewed as being another small step in the United States toward a possible legalization of marijuana at the federal level.

The company plans to invest US$100-150 million to set up operations designed to produce tonnes of hemp extract. The recent passage of the Farm Bill will allow the production industrial hemp by American farmers.

Investments in the past year added specialty branded goods producers and a top hemp research company, further strengthening Canopy Growth’s position in the industry.

The stock currently has a market capitalization of $20 billion, giving it significant firepower to make additional acquisitions and investments in production growth.

HEXO

With a market capitalization of $1.4 billion, HEXO is a much smaller player in the industry, but the company has done a good job of dipping its toes in all the key areas of the market.

As Quebec’s leading cannabis supplier, HEXO might be an attractive takeover target for one of its larger peers. The province is the second largest by population and holds long-term growth potential in both the medical and recreational marijuana segments.

HEXO has partnered with Molson Coors Canada to create a joint venture to market cannabis-infused drinks when they become legal in Canada. The deal gives HEXO a chance to compete with Canopy Growth in the cannabis-infused beverages segment.

Overseas, HEXO is building a production facility with a partner in Greece to supply cannabis to the European medical marijuana market.

The stock is up from $4.25 in late December to $7 per share. The 12-month high is just above $9.

Is one a better bet?

Canopy Growth is probably the more attractive pick for a buy-and-hold position in your portfolio.

Investors who have a shorter-term objective might consider a position in HEXO on the anticipation of a takeover. The industry is expected to consolidate to the point where a handful of companies dominate the market. Given its strategic position in Quebec and its relationship with Molson Coors Canada, HEXO could command a nice premium in the event a bidding war emerges for the company.