In January, Cowen analyst Vivien Azer was high on Canopy Growth's (NYSE:CGC) prospects. Azer predicted that Canopy's sales would skyrocket 225% in fiscal 2020, which begins in April. She pointed to Canopy Growth's industry-leading market share in the Canadian recreational marijuana market as a big plus for the company.

But Canopy Growth is no longer Vivien Azer's top pick. She now likes Aurora Cannabis (NYSE:ACB) best of all and thinks the stock could jump more than 30% above its current level. Why does a top analyst think that Aurora Cannabis beats Canopy Growth as the best marijuana stock on the market right now? 

Marijuana leaves and $100 bills

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Capacity is king

Azer's top reason for liking Aurora Cannabis so much is its production capacity. She wrote to clients that Aurora's capacity provides the company "with the necessary infrastructure to weather early storms in adult use while continuing to grow higher-value revenues in the medical market."

This perspective is probably right on target. Aurora Cannabis stated in its fiscal 2019 Q2 update that it was operating at an annualized production run rate of around 120,000 kilograms. However, the company said then that by the end of March its annual production capacity would be increased to 150,000 kilograms.

But Azer knows Aurora should be on track to be able to produce around 575,000 kilograms of cannabis per year. That should be enough to top Canopy Growth based on the two companies' current plans.

The reality in the Canadian marijuana market right now is that capacity is king. That's not likely to change anytime soon. And if Aurora maintains an industry-leading capacity, the company just might wear the crown instead of Canopy Growth.

Check out the latest earnings call transcript for Canopy Growth and other companies we cover.

Beyond Canada

Azer wasn't just focused on Aurora Cannabis' tremendous production capacity, though. She also liked that Aurora has a presence in 23 countries. Azer thinks this gives the company an inside track to boost its global market share considerably. 

Aurora Cannabis will soon bump the number of international countries where it operates to 24. The company recently announced that it's acquiring a majority interest in Portugal-based Gaia Pharm and will rename the business Aurora Portugal.

These international efforts are indeed important. The international medical marijuana opportunity should be bigger over the long run than Canada's total marijuana market, including medical and recreational cannabis. 

Aurora has a slight edge over Canopy Growth in international sales for now. In the last quarter, Aurora reported international sales of $2.9 million Canadian (around US$2.2 million), while Canopy Growth announced international sales of CA$2.7 million (roughly US$2 million).

The big swing factor 

Of course, Aurora Cannabis didn't leap over Canopy Growth in production capacity and international operations between early January -- when Azer favored Canopy -- and March. But one thing has changed significantly and no doubt was a major factor in Azer's swinging her support to Aurora as the top marijuana stock. 

Canopy Growth's market cap has jumped nearly 70% year to date and now stands at around $15.6 billion. Aurora Cannabis has enjoyed a strong performance, too. However, its market cap of a little over $8 billion is barely over half that of Canopy Growth's market cap.

With this in mind, it makes sense that Azer would change her top pick to Aurora. At least for now, Canopy Growth ranks behind Aurora in planned production capacity and international sales. With Azer ranking capacity and international operations at the top of her list for evaluating marijuana stocks, Aurora's lower market cap pretty much makes it a no-brainer pick over Canopy Growth.

Flies in the ointment

There are at least two potential problems in going with Aurora Cannabis over Canopy Growth, though. One is that Canopy is already moving aggressively into the U.S. hemp market while Aurora is acting much more cautiously. The U.S. hemp market could be huge, so Canopy could gain a key advantage over Aurora.

An even bigger advantage for Canopy Growth, and a big issue for Aurora Cannabis, is its partnership with Constellation Brands. The big alcoholic-beverage maker invested $4 billion in Canopy late last year.

This infusion of cash gives Canopy the financial flexibility to expand significantly without taking on additional debt or issuing new shares. Constellation also brings to the table a successful track record at building consumer brands, something that will become increasingly important in the cannabis industry.

Aurora Cannabis might attract its own big partner down the road, but there's no guarantee that it will do so. If that doesn't happen, Canopy Growth's Constellation connection could cause analysts like Vivien Azer to move back into its camp in the future.