Canopy Growth Corporation (NYSE:CGC) reported better-than-expected fiscal 2020 third-quarter results last Friday. In turn, the market bid the pot titan's stock up by a healthy 13.4% on extremely heavy volume. Heading into Canopy's latest quarterly earnings, however, Wall Street's expectations were rather subdued, thanks to Aurora Cannabis' (NYSE:ACB) awful fiscal 2020 second-quarter results released the day before on Feb. 13. In short, Canopy was widely expected to underperform due to many of the same industrywide issues -- such as the dearth of retail outlets in key provinces and the slow introduction of high-margin derivative products -- plaguing Aurora at the moment. 

What these back-to-back earnings reports made painfully clear, though, is that Canopy and Aurora are now on markedly different trajectories. Canopy has started to emerge as the undisputed king of the Canadian legal cannabis market, whereas Aurora is hanging on for dear life. With Canopy separating itself from the pack, should value and growth investors alike take a flier on this speculative pot stock? Let's break down the company's core value proposition to find out.

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Canopy: The long and winding road to big weed

The big-picture issue is that the global cannabis market might hit a jaw-dropping $200 billion in annual sales by 2030. To arrive at this massive sales figure, pot needs to become legal for recreational and medical purposes across the Western world. What's more, the cannabis industry will need to significantly expand into several secondary markets such as beverages, candles, cosmetics, perfumes, skin care products, shampoos, soaps, and topical creams, just to name a few.

The good news is that all of these high-dollar opportunities -- and perhaps several unforeseen ones revolving around the use of rare cannabinoids -- are still on the table. The bad news is that the industry's formative period will be brutal, a fact that's been playing out for the past 10 months with numerous executive departures, a sea of red ink, and a wave of downsizing across the space.

What this all means is that there will likely be only a few ginormous companies left standing at the end of the day. And once that happens, we will have officially entered the era of big weed. Canopy, for its part, has finally started to show clear-cut signs that it could be one of these elite few.

Canopy's newly minted CEO David Klein stated as much in the company's latest quarterly conference call: 

I firmly believe Canopy is well positioned to win in the global cannabis market. We have a leading market share in the recreational market in Canada and a strong position in the medical market in both Canada and abroad. Additionally, I believe Canopy has the opportunity to create an unassailable global position in cannabis.

The bottom line is that Canopy should directly benefit from the perpetual struggles of chief competitors like Aurora. So, while Canopy is still losing money at an alarming rate and there's no telling when it will achieve profitability on a recurring basis, the overarching market dynamics have clearly started to favor Canopy -- a point underscored by its exceptional third-quarter results. Moreover, if Aurora can't change this narrative soon, Canopy may ultimately end up drinking its milkshake, so to speak. 

Is this top pot stock an outstanding buy?

Cautious optimism is arguably warranted on the heels of these surprisingly strong financial results. Canopy still sports a sky-high valuation that simply isn't supported by its near-term outlook. Furthermore, it has to continue to grow sales, while drastically cutting expenses, in a period characterized by less-than-optimal market dynamics.

On the bright side, if David Klein can pull off this herculean feat, Canopy should have the inside track to the winner's circle in an industry that could experience exponential growth over the next decade. In brief, management may be the deciding factor in this ongoing war of attrition. Investors, therefore, should probably tie their buy or sell decisions directly to their view of Canopy's brain trust. Execution will be the name of the game from this point forward, after all.