It's been a bad year so far for Cronos Group (NASDAQ:CRON), with the marijuana grower's share price dropping 14%. But 2018 has been downright horrible for Aphria (NASDAQOTH: APHQF). The stock is down a whopping 46%.

At first glance, you might think that Aphria is in bigger trouble than Cronos Group. However, past stock performance doesn't tell the full story about future prospects. Which of these two marijuana stocks is actually the better buy right now? Here's how Aphria and Cronos Group compare.

Marijuana buds on top of tiny Canadian flags

Image source: Getty Images.

The case for Aphria

Let's first address why Aphria stock has bombed so far this year. Several factors that have weighed on other marijuana stocks, such as a delay in the legalization of recreational marijuana in Canada, also caused problems for Aphria. But the big issue for the company has been associated with its acquisition of smaller marijuana grower, Nuuvera -- including allegations that several Aphria executives and directors owned positions in Nuuvera that they didn't disclose early on.

Aphria CEO Vic Neufield acknowledged that he and other members of the company's management team owned shares of Nuuvera prior to the takeover bid. However, he insisted that they did nothing wrong. The Ontario Securities Commission's stance is that Aphria's buyout of Nuuvera was an "arms-length transaction" that didn't require disclosure of ownership of shares by Aphria insiders.

Putting this controversy aside, Aphria's acquisition of Nuuvera could position the company for solid international growth. With the buyout of Nuuvera finalized, Aphria now has a presence in Germany, Italy, Spain, Portugal, Malta, Australia, and Lesotho. The most lucrative of these opportunities by far is Germany, which legalized medical marijuana in 2017.

Aphria is also poised to become a significant player in Canada's recreational marijuana market, assuming everything stays on track with legalization legislation in the country. Thanks in large part to its Broken Coast Cannabis acquisition and expansion efforts, Aphria expects an annual production capacity of around 230,000 kilograms by early next year. 

The company's current core business of supplying medical marijuana for the domestic market in Canada also presents opportunities for growth. Aphria's sales for the quarter ending Nov. 30, 2017, jumped nearly 40% year over year to 8.5 million Canadian dollars. In addition, Aphria reported its ninth consecutive quarter of positive adjusted EBITDA

The case for Cronos Group

Cronos Group can boast of being the first -- and, for now, only -- Canadian marijuana grower whose stock trades on the Nasdaq stock exchange. The stock was listed on the Nasdaq in February. Cronos stock also continues to trade on the Toronto Stock Exchange.

Both Cronos and Aphria share the same opportunities. Cronos is hoping to grow through providing medical marijuana to international markets. The company has an exclusive cannabis supply agreement with Pohl-Boskamp, which distributes products to more than 12,000 pharmacies in Germany. Cronos is participating in a joint venture to supply medical marijuana to Australia, New Zealand, and Southeast Asia. It also has a joint venture with Kibbutz Gan Shmuel, which exports to 35 countries in Europe and Asia. 

Although Cronos Group's production capacity isn't as great as Aphria's, the company could still become a force in the retail marijuana market in Canada. In March, Cronos announced that it was teaming up with Medmen, the largest retail marijuana chain in California. The two companies formed a joint venture, Medmed Canada, that plans to develop branded products and open stores across Canada, pending legalization of recreational marijuana in the country.

Cronos also is busy expanding its capacity. It expects to have its Peace Naturals facility expansion completed this summer, with a projected annual capacity of 40,000 kilograms by 2019. 

Like Aphria, Cronos Group has enjoyed massive growth in the Canadian medical marijuana market. In the quarter ending Sept. 30, 2017 -- the latest quarter for which the company has reported results, Cronos posted sales of CA$1.3 million, more than 10 times the level from the prior-year period.

Better buy

Which of these two marijuana stocks is the better choice? I'd go with Aphria.

Because of the huge stock decline this year, Aphria's market cap now stands at around $1.6 billion, compared to a market cap of $1.1 billion for Cronos Group. But Aphria has a significant advantage in capacity. Investors get more bang for the buck with Aphria.

Both stocks face significant risks, though. There's a distinct possibility that Canada could have a supply glut, although rising global demand for medical marijuana could provide an outlet for surplus capacity. And the country could have more bumps in the road with the legalization of recreational marijuana. I think Aphria is the better choice between these two stocks, but it's probably not a great pick for investors who might be uneasy about significant volatility.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.