Aurora Cannabis (NYSE:ACB) surprised nearly everyone in mid-May with better-than-expected fiscal 2020 third-quarter results. The Canadian cannabis producer's sales soared, and so did its stock.

It was a much different story for Canopy Growth (NYSE:CGC) when the company reported its fiscal 2020 fourth-quarter update last week. Canopy's sales declined from the previous quarter. And its shares plunged.

With the two divergent quarterly updates, is Aurora now the better pick for long-term investors? I don't think so. Instead, here are three reasons why Canopy Growth is still a better marijuana stock to buy than Aurora Cannabis.

Hands holding two cannabis leaves

Image source: Getty Images.

1. A big partner

If there's one thing that Canopy Growth founder and former CEO Bruce Linton did right, it was to land Constellation Brands (NYSE:STZ) as a major equity partner. Granted, that partner later helped push Linton out the door, but it was still a great long-term move for Canopy.

I also think that one of the worst failures for Aurora Cannabis founder and former CEO Terry Booth was that he didn't secure a big equity partner for Aurora. Booth went along with billionaire investor Nelson Peltz's idea that it would be better for Aurora to remain independent and only seek partners from outside the cannabis industry who didn't want a stake in the company.

My view is that Canopy's partnership with Constellation gives it a both a short-term and long-term advantage over Aurora. In the short-term, I think that the cannabis-infused beverages that Canopy and Constellation developed together will be a commercial success. Constellation Brands CEO Bill Newland even thinks the products will be "game-changers".

What about the long-term advantage? Sooner or later, the U.S. will change its federal laws to allow the legal sale of marijuana (probably by recognizing the right of individual states to enforce their own laws). When that happens, I expect that Canopy's relationship with Constellation, which already has an impressive presence in the U.S. adult beverage market, will pay off in a significant way.

2. A lot of cash

There's another advantage that Canopy's partnership with Constellation provides that merits its own line item -- a whole lot of cash. Canopy ended its latest quarter with a cash stockpile totaling nearly 2 billion in Canadian dollars. Aurora's cash position at the end of its quarter stood at CA$230.2 million in cash. 

Neither company is profitable yet. That means they both will continue to burn through their cash stockpiles. Canopy clearly has a lot more to burn.

Aurora CFO Glenn Ibbott said in the company's Q3 conference call that its cash position should be enough to fund operations until the company can generate positive cash flow. However, interim CEO Michael Singer admitted the uncertainty in the market could mean that Aurora will have to access its at-the-market (ATM) facility to generate more cash. Don't be surprised if that happens, with more dilution for Aurora's shares possibly on the way.

3. An expectations advantage

Stocks move up and down in large part due to how companies perform against expectations. Expectations are rising for Aurora and falling for Canopy. This makes it easier for Canopy to beat expectations and harder for Aurora to do so.

Why do I think expectations are moving in different directions for these two cannabis producers? Because of what the companies have said themselves.

Aurora's executives stated in the company's Q3 call that Aurora is on track on all of its key metrics. They are standing behind their commitment to achieve positive adjusted EBITDA in the quarter ending Sept. 30, 2020. Meanwhile, Canopy said that it's withdrawing previous milestones for generating positive adjusted EBITDA and net income because of the company's new strategic focus and uncertainties connected to the COVID-19 pandemic.

But Aurora now has to stay on track with all of its key metrics and hit the goal of positive adjusted EBITDA or face a backlash. Canopy, on the other hand, could pleasantly surprise investors over the next few months with a clear plan for achieving profitability. It's an expectations game that Canopy is now in a better position to win.

Better than Canopy

Just because I think Canopy Growth is still better than Aurora Cannabis doesn't mean I think that it's the best stock in the cannabis market right now. My view is that there are several U.S.-based marijuana stocks that are better than Canopy.

There's one U.S. stock that I think is better than Canopy that we've already mentioned -- Constellation Brands. If Canopy succeeds, so does Constellation since it's Canopy's biggest shareholder. Constellation also continues to dominate the U.S. premium beer market. Its new Corona Hard Seltzer products should fuel more growth, as should its increased focus on premium wine and spirits brands. You don't have to look very far to find more attractive options than either Aurora or Canopy.