Marijuana stocks have captured the imagination of high-growth investors, who hope that major companies in the industry will be able to take early command of the budding cannabis market and become household names across the globe. Among the top companies in the field, Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) have emerged as true contenders with their early-mover status, and with the backing of Constellation Brands (NYSE:STZ), Canopy seems like a natural favorite to become the real leader of the marijuana market.

Canopy Growth expects to release its fiscal second-quarter financial report on Wednesday, Nov. 14, and investors will be looking closely at the company to see whether it can keep up the pace in a fast-growing market. Indeed, with Aurora Cannabis having reported sales for the September quarter that were higher than what Canopy brought in three months early, Canopy is in a position in which it's having to play catch-up -- at least temporarily -- to stay ahead of Aurora Cannabis from a revenue standpoint.

Tweed-branded products lined up in boxes and bottles on a wood mantle in front of a wood-paneled wall.

Image source: Canopy Growth.

Stats on Canopy Growth's fiscal second-quarter earnings

EPS Estimate

(CA$0.08)

Last Quarter's EPS

(CA$0.23)

Revenue Estimate

CA$75.3 million

Change From Last Quarter's Revenue

190%

Data source: S&P Global Market Intelligence.

A big boom for Canopy Growth?

Canopy Growth investors are looking for an extremely strong performance from the cannabis producer for the third quarter. Revenue is expected nearly to triple, and although Canopy isn't likely to become profitable as long as it has so much growth potential in which to invest any available financial resources, its bottom line is seen showing considerable improvement even compared to just three months ago as sales ramp up.

That level of sales growth is important from a competitive standpoint, because peers in the industry have also seen big leaps in revenue. For instance, Aurora Cannabis said Monday that its fiscal first-quarter revenue jumped 260% to 29.7 million Canadian dollars, with cannabis-related revenue climbing at a 236% pace year over year. Operationally, Aurora managed to see dramatic improvements in key metrics, including production volume that almost quintupled, sales volume by weight that tripled, and active registered patient counts that were up 250% from year-earlier levels.

Seeking to be the industry leader

Yet Canopy Growth has already demonstrated a solid track record of delivering big results. In its fiscal first-quarter report three months ago, Canopy reported a 63% rise in revenue, with strength in several essential measures of success. Selling prices per gram improved by nearly CA$1 to CA$8.94, and the company boasted more than 85,000 patients in the medical cannabis sector. The company's key Spectrum Cannabis soft-gel product continued to gain traction, with an operational network spanning 11 companies.

Canopy is pursuing growth in several directions. The company's wholly owned subsidiary Canopy Health Innovations is looking at clinical trials of cannabis for treating insomnia, and it expects further research to continue. The Canopy Animal Health unit will do similar work for potential veterinary treatments.

The most important thing for Canopy to concentrate on right now, however, is the opportunity to serve the new recreational cannabis market in Canada. In preparation for the mid-October legalization of marijuana, Canopy had already sought to maximize the amount of cannabis it would deliver to provincial and territorial governments for the post-legalization rollout, and co-CEO Bruce Linton noted back in August that it had already secured commitments to provide an estimated 36% of total supply, giving it "by far the deepest channel into the Canadian recreational cannabis market."

What to watch for

Indeed, Linton sees the company as the key innovator in the marijuana space in Canada for the foreseeable future. As the co-CEO put it:

To drive our brand down to main street Canada and capture retail margin, we successfully invested in securing Tweed cannabis store licenses in Newfoundland and Labrador, Manitoba, and Saskatchewan, and we expect to leverage these successes in Alberta as well as in the anticipated private retail framework in Ontario. Canopy is developing the leading private cannabis retail channel in Canada.

Of course, those numbers won't even show up in Canopy's fiscal second-quarter results, because the quarter ended on Sept. 30 prior to the rollout of Canadian recreational marijuana. What will appear, though, is a full reckoning of all the supply agreements Canopy was able to secure, along with an early picture of how post-legalization sales have gone. Those numbers should go a long way toward telling whether the company is making the most of its opportunities.

Don't stop looking at Canopy Growth

With a flood of marijuana earnings reports coming out this week, there'll be a lot of competition for your attention. But with such a strong track record so far, Canopy Growth is a marijuana stock that deserves a close look, not just for its own sake but also as an indicator of how the entire cannabis industry is performing.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.