What a difference a new year has made for top marijuana stocks. In 2017, Aphria (NASDAQOTH:APHQF) stock nearly quadrupled in value, while Canopy Growth Corporation (NASDAQOTH:TWMJF) shares soared close to 250%. So far this year, however, Aphria's share price has sank more than 20%. Canopy stock has performed better, but it's still down around 5%.

How much weight should investors give to the past performance of these two marijuana stocks when making a decision about which is the better buy? Zero. What really matters is how well each company is positioned for growth. Here's how Aphria and Canopy Growth compare.

Marijuana in front of globe

Image source: Getty Images.

The case for Aphria

Aphria quickly became one of the leading suppliers of medical marijuana in Canada. The company currently ranks as the third-largest marijuana grower in terms of market cap. 

For now, Aphria's focus continues to be on the rapidly expanding medical marijuana market. Aphria reported 39% quarter-over-quarter and 63% year-over-year revenue growth for its fiscal 2018 Q2, which ended Nov. 30, 2017. While that growth is impressive, the actual revenue generated in the quarter was only 8.5 million Canadian dollars.

But Aphria's revenue should skyrocket in the near future. Canada is set to legalize recreational use of marijuana later this year. When that happens, the companies with the most production capacity will emerge as the biggest winners.

Aphria expects to have capacity to grow more than 200,000 kilograms per year by early 2019. The company has two major expansions under way. An additional 200,000 square feet of greenhouse space will be operational by May 2018. This added space should produce 21,000 kilograms of marijuana each year. Aphria also expects an even larger greenhouse that will add another 70,000 kilograms of annual production capacity will be ready by January 2019. 

The other big opportunity for Aphria is in supplying medical marijuana to international markets. Aphria reversed course on its plans to build a major presence in the U.S. market after the Toronto Stock Exchange threatened to delist Aphria stock. However, the company continues to be very active in other international markets.

Aphria recently announced an acquisition of Nuuvera for CA$826 million. Nuuvera has a presence in eight countries in addition to Canada, most importantly including Germany. With Aphria's agreements to supply medical marijuana to Australia, the Nuuvera deal will put the company in 11 markets worldwide.

The case for Canopy Growth

For Canopy Growth, you can take nearly everything I just wrote about Aphria and crank it up a notch or two. Like Aphria, Canopy Growth is one of the leading suppliers of medical marijuana in Canada. In fact, it's currently the largest marijuana grower in terms of market cap, with Aurora Cannabis breathing down its neck.

Canopy reported CA$21.7 million of revenue in its latest quarter, the highest sales ever reported in the Canadian marijuana industry. The total represented a quarter-over-quarter increase of 23% and a year-over-year jump of 123%.

Of course, Canopy Growth is gearing up significantly for the coming legalization of recreational marijuana in Canada. The company has already signed supply agreements for recreational marijuana with four Canadian provinces. Canopy established joint business operations with large greenhouse operators in British Columbia and Quebec to retrofit more than 3.7 million square feet of greenhouse space to grow cannabis. Just days ago, Canopy also inked a deal with Sunniva to buy up to 90,000 kilograms of marijuana over a two-year period.

Canopy Growth is already experiencing success internationally. The company reported record-high medical marijuana sales in Germany in its latest quarterly update. Canopy is also active in other countries, including Australia, Brazil, Chile, Denmark, Jamaica, and Spain.

Then there's the feather in Canopy's cap that no other Canadian marijuana grower can claim: a significant investment from an S&P 500 company. In October 2017, alcoholic beverage maker Constellation Brands paid $245 million for a 9.9% stake in Canopy. Constellation also plans to partner with Canopy to market a cannabis-infused beer.

Better buy

Both Aphria and Canopy Growth should benefit tremendously from legalization of recreational marijuana in Canada and the increasing acceptance of medical marijuana across the world. But if I had to choose just one of these stocks, I'd go with Canopy.

Canopy Growth appears to be taking all the right steps to succeed in a retail market. Not only has the company ramped up its capacity, it has also been the most aggressive at lining up supply deals with provinces. In addition, Canopy is in great shape to serve international markets, especially in Germany, thanks to its acquisition of MedCann GmbH Pharma and Nutraceuticals in 2016. 

But are either of these stocks good picks for investors? There certainly is significant risk. However, I think that if the Canadian recreational market and international medical marijuana markets become as large as many predict, the stocks of these marijuana growers will have plenty of room to move higher -- despite their current astronomical valuations. 

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.