Marijuana might be a commodity, but it's another story for the companies that grow marijuana. Each business has its unique strengths as well as weaknesses.

Aphria (NASDAQOTH:APHQF) and Village Farms (NASDAQOTH:VFFIF) serve as good examples. The two Canadian marijuana growers are at very different stages. For much of 2018, Aphria and Village Farms stock prices followed a similar trajectory downward. However, since mid-April, Village Farms has been up around 30% while Aphria continued to flounder. 

But which of these two marijuana stocks is the better choice for investors now? Here's how Aphria and Village Farms compare.

Marijuana growing in greenhouse

Image source: Getty Images.

The case for Aphria

The downside for investors who've owned Aphria stock for a while is that the company's share price has sank so far in 2018. That's in large part due to Aphria's acquisition of Nuuvera. The company's issuance of new stock to fund the deal caused serious dilution in the value of existing shares. Several Aphria executives were also embroiled in a controversy over not disclosing their stakes in Nuuvera prior to the acquisition being finalized.

There's arguably a big potential upside for Aphria now, though. Canada appears to be set to legalize the adult use of marijuana for recreational purposes, with the Canadian Senate voting to pass legislation to move forward with legalization on June 7.

As one of the five biggest marijuana growers in Canada, Aphria could be one of the biggest winners from the legalization of recreational marijuana. The company already ranks among the lowest-cost producers of marijuana in the country. Aphria's acquisition earlier this year of Broken Coast Cannabis combined with its own expansion efforts should allow the company to claim annual production capacity of 225,000 kilograms by early next year.

An even bigger opportunity for Aphria, though, is in the global medical marijuana market. Thanks to the Nuuvera acquisition, Aphria now has a presence in eight additional international markets. The most important of these markets is Germany, where Nuuvera has a supply agreement with the No.2 pharmaceutical distributor.

One especially intriguing international opportunity for Aphria is close to home. The company began to expand its operations in the U.S. last year, but the threat of losing its listing on the Toronto Stock Exchange (TSX) caused Aphria to curtail its U.S. activities. Now, however, President Trump has signaled his support for a change in U.S. federal laws. There's a real possibility that in the not-too-distant future Aphria could operate in the U.S. without the fear of a TSX delisting.

The case for Village Farms

Village Farms' market cap is only a fraction the size of Aphria's. The company didn't even get into the marijuana business until last year. But being small and being new to the industry doesn't mean there's not a reason for investors to consider Village Farms.

While Village Farms is new to marijuana, the company has been in business for 30 years. During that period, Village Farms grew to become a leading grower of greenhouse tomatoes, bell peppers, and cucumbers in North America. 

In June 2017, Village Farms teamed up with Emerald Health Therapeutics (NASDAQOTH:EMHTF) to form a 50-50 joint venture, Pure Sunfarms. Village Farms' initial contribution to the joint venture was to lease a 1.1 million square foot greenhouse to Pure Sunfarms. The company estimates that this facility will be able to grow around 75,000 kilograms of cannabis annually once the entire planned retrofitting is completed.

Village Farms thinks that its long history as a low-cost operator of greenhouses for growing produce gives it a competitive advantage. The company thinks that Pure Sunfarms could become one of the lowest-cost marijuana growers with per gram costs below 1 Canadian dollar.

And if additional capacity is needed to meet global demand for marijuana, Village Farms should be in good shape to step up to the plate. The company has significant room for expansion with around 3.5 million square feet of greenhouse space that could be converted to growing cannabis.

Better marijuana stock

Remember the old saying that a bird in the hand is worth two in the bush? I think it's applicable when evaluating Aphria versus Village Farms.

Aphria already has an annual production capacity of 32,500 kilograms. Expansion plans are well underway to crank that capacity up to the target 225,000 kilograms by early 2019. The company is already successful in the Canadian medical marijuana market. Aphria already has relationships in international markets. It has a strong distribution partner in place for the retail marijuana market in Canada.

Village Farms projects that the greenhouse leased to Pure Sunfarms will be able to produce 7,000 to 8,000 kilograms in the second half of this year. Reaching the targeted annual production capacity of 75,000 kilograms will take more retrofitting and more time. Neither Village Farms nor Pure Sunfarms has the level of preparedness that Aphria has for the domestic retail marijuana market or the global medical marijuana markets.

My view is that Aphria is the better marijuana stock. The company simply has more birds in its hands instead of in the bush.

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.