The global economy is currently in a state of turmoil because of the COVID-19 pandemic. For investors who are still looking to put their money in stocks during these challenging times, it is essential to invest in companies that have the financial resources to handle the ongoing crisis. Many cannabis companies simply don't fit the bill, however, for a variety of reasons.

First, red ink on the bottom line is the norm rather than the exception in the cannabis industry. Second, many marijuana companies have little by way of cash on hand to fund their operations, and many of them will have to take on additional debt -- or find ways to reduce their expenses -- to survive. Fortunately, some pot companies have a boatload of cash on their balance sheets. Let's look at two of these companies: Canopy Growth (CGC -10.45%) and Cronos Group (CRON -2.79%).

Two cannabis leaves on top of a hundred dollar bill.

Image source: Getty Images.

Canopy Growth

At the end of its latest reported quarter -- the third quarter of 2020 -- Canopy had about 1.6 billion Canadian dollars in cash and cash equivalents. This figure tops that of almost any of Canopy's peers in the cannabis industry. Much of Canopy's pile of cash came from its deal with Constellation Brands (STZ -1.18%). As a reminder, the beverage maker invested CA$5 billion and acquired a 37% stake in Canopy Growth in 2018.  

Even beyond its cash balance, though, Canopy's performance during the third quarter was strong. The company's net revenue of CA$123.8 million increased by 62% sequentially, while a net loss of CA$124.2 million was a significant improvement from the net loss of CA$374.6 million the company recorded during the previous quarter.

Canopy's performance moving forward could get even better, and this is for two major reasons. First, Canopy remains the leader in its domestic 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," CEO David Klein said in February. Second, we have yet to see the effect of Canopy's suite of derivative products on its financial results.

The pot grower started launching cannabis derivative products in legally licensed retail cannabis stores in December of 2019. Canopy's rich portfolio of derivative products includes Tokyo Smoke Pause, a cannabis-infused dark chocolate product containing 2 mg of tetrahydrocannabinol (THC) and negligible traces of cannabidiol (CBD).

Canopy's portfolio of derivative products also includes a line of canned nonalcoholic cannabis-infused beverages in several flavors called Tweet RTD, each can of which contains 2 mg of THC. With its leading market share in Canada, Canopy could be one of the big winners in the cannabis derivative market. And that, combined with the company's cash balance, will help Canopy weather the COVID-19 crisis better than most of its peers. 

Cronos Group 

Much like Canopy Growth, Cronos Group was able to find a big-name partner with deep pockets. In Cronos's case, that partner was Altria (MO -0.36%). In December of 2018, the tobacco giant announced it would acquire a 45% stake in Cronos for CA$2.4 billion. This acquisition closed in March of 2019. Thanks to this deal, Cronos Group has consistently been one of the most cash-rich companies in the cannabis industry. In its most recent results, from the first quarter of 2020, the pot grower had about CA$1.1 billion in cash and cash equivalents.

The partnership with Altria had other benefits for Cronos, too. For instance, Cronos launched a hemp-based CBD brand in retail stores in the U.S., a feat the company was able to achieve largely thanks to its partnership with Altria. "PEACE+ will sell hemp-derived CBD tincture products through a test market of approximately 1,000 retail stores in the U.S.," management said in a release. "The Company intends to utilize Altria Group, Inc.'s sales and distribution network to access the U.S. convenience store retail channel in order to gain consumer insights prior to expanding distribution more broadly."

With that said, though, Cronos's financial results remain unimpressive. During the first quarter, the company reported revenue of CA$8.4 million, a 15.4% sequential increase that was nonetheless below the CA$10.8 million analysts were expecting. And while Cronos recorded net income of CA$75.7 million, the company did benefit from CA$113.4 million gains on the revaluation of derivative liabilities related to the Altria investment. Without this dubious source of income, Cronos would have recorded a net loss.

Given Cronos's mediocre performance in the first quarter, it isn't surprising that the company's stock slid by 3% on the heels of the release of its earnings report.

Are they buys?

Both Canopy and Cronos have performed worse than the broader market of late. Canopy's stock is down by 22% year to date, while Cronos's stock is down by 26.6%. By contrast, the S&P 500 is down by 8.6% since the beginning of the year. Should investors scoop up shares of one -- or both -- of these cannabis stocks for a discount? I think of these two companies, only Canopy is worth considering at the moment, at least for investors comfortable with a little more risk and volatility than the rest of us, and who are willing to ride out the current crisis and hold the company's shares for awhile.

Thanks to its leading position in the Canadian market and its partnership with Constellation Brands, Canopy could eventually post consistently strong and growing revenue -- with relatively high margins, thanks to its cannabis derivative products -- and might manage to erase the red ink on its bottom line. And given that the company's shares are significantly cheaper than they were a year ago, now may be as good a time as any for interested investors to buy in.