Talk about a role reversal. It wasn't long ago that Canopy Growth (NYSE:CGC) was the star of the cannabis world, while Aphria (NYSE:APHA) reeled from a controversy. Now it's a much different story.

Canopy Growth has caught a lot of flak for two consecutive quarters of disappointing results. The company fired its former CEO. Meanwhile, Aphria is coming off an unexpectedly strong quarter where it posted a tidy profit.

Which of these two cannabis stocks is the better pick for investors now? Here's how Canopy Growth and Aphria compare.

Cannabis leaf on top of $100 bills.

Image source: Getty Images.

The case for Canopy Growth

Let's first address the elephant in the room for Canopy Growth. The company isn't anywhere close to profitability. Canopy's apparent channel stuffing of cannabis oil and softgel products caused it to take a big write-off in the fiscal 2020 first quarter because of anticipated product returns. This issue makes Canopy's path to profitability even more uphill.

Having gotten that out of the way, though, the fact remains that Canopy sits in an enviable position in the cannabis industry. Canopy is arguably poised for greater success than any of its rivals in the "Cannabis 2.0" cannabis derivatives market scheduled to launch soon. The company is ready to release a wide lineup of products, including cannabis beverages, edibles, and vapes.

Over the long run, Canopy's opportunities in international medical cannabis markets look even brighter than those in the Canadian adult-use recreational market. Canopy ranks among the leaders in European and Latin American medical cannabis markets.

The biggest market of all is the U.S. And that's where Canopy Growth could be the most dominant of the top Canadian cannabis producers. Canopy plans to launch hemp cannabidiol (CBD) products produced from its large-scale hemp facility in New York state later this year. The company also stands ready to enter the U.S. recreational marijuana market as soon as federal laws permit, thanks to its deal to acquire U.S. cannabis operator Acreage Holdings.

Investors shouldn't worry too much about Canopy Growth running out of money despite its sluggish pace in becoming profitable. The company still had over 3.1 billion Canadian dollars (around $2.4 billion) in cash, cash equivalents, and marketable securities as of June 30, 2019. With its partner and largest shareholder, Constellation Brands, having deep pockets and a burning desire to ensure that its huge investment in Canopy Growth pays off, Canopy will be able to raise more cash if necessary.

The case for Aphria

Aphria's stock price still hasn't fully recovered from allegations made late last year that it drastically overpaid for Latin American acquisitions in a deal that lined the pockets of key insiders. However, its business operations appear to be firing on all cylinders right now.

As mentioned earlier, Aphria turned in a fantastic performance in its fiscal 2019 fourth quarter. The company posted a quarter-over-quarter revenue increase of 158% in the Canadian adult-use market. Most importantly, Aphria announced a profit of CA$15.8 million.

Aphria's nice bottom line stemmed largely from its acquisition earlier this year of German medical cannabis and pharmaceutical distributor CC Pharma. This acquisition also helped make Aphria the No. 1 cannabis producer based on international sales.

The company ranks very highly in another important category: production capacity. Aphria is on track to produce 255,000 kilograms of cannabis on an annual basis. That's enough to place third in the cannabis industry. But Aphria's market cap is only the fifth-highest, giving the company an attractive valuation based on "bang for the buck" in terms of capacity.

Probably the biggest knock against Aphria right now is that it doesn't have a clear strategy for entering the U.S. hemp market, nor does it have a major partner from outside the cannabis industry. However, Aphria Chairman and interim CEO Irwin Simon hinted in the company's Q4 conference call that Aphria does "have a lot of plans for the U.S.," and mentioned the possibilities of partnerships, acquisitions, or strategic alliances.

Better buy

I think that Canopy Growth is in a stronger position than many think it's in. Investing in marijuana stocks is like riding on a roller coaster -- the downward plunges are usually followed by another upward turn. I suspect we'll see Canopy rebound.

However, if I could pick only one of these stocks right now, it would be Aphria. My view is that Aphria remains a top candidate for a big player outside of the cannabis industry to partner with. With a market cap of only around $1.4 billion, Aphria should have plenty of room to run over the long term as the global cannabis industry picks up momentum.