The U.S. cannabis industry is performing exceptionally well this year, even with a market that's limited by the lack of federal legalization. The coronavirus pandemic has helped drive sales of marijuana, and the drug is seeing growing acceptance as a consumer staple.

However, the case is different in Canada, where marijuana has been legal for awhile now. For several reasons -- including regulatory delays that held up the opening of legal stores and a thriving black market -- Canadian pot companies haven't seen the drastic revenue growth numbers many predicted.

Take Canopy Growth (NYSE:CGC), which is one of the most popular Canadian cannabis stocks, especially after the deal it struck with beverage giant Constellation Brands in 2017. It's also the one with the highest market cap at $6 billion -- but it has yet to hit profitability. Then there's Ontario-based Aphria (NASDAQ:APHA), valued at $1.3 billion and perhaps the only truly safe cannabis stock right now. Let's take a look at which of these two is a better buy.

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Canopy Growth looks safe -- for now

Canopy Growth manufactures and sells cannabis products under the brand names Tweed and Tokyo Smoke, among others. In a growing industry where having enough cash on hand is a priority, Canopy's pockets are full thanks to the aforementioned partnership with Constellation Brands. The latter company invested 245 million Canadian dollars in the former in 2017, and Constellation has been increasing its stake since then -- including a recent investment of CA$245 million achieved by exercising some warrants in May -- showing the faith it has in the company's potential. Canopy had CA$2 billion in cash, cash equivalents, and marketable securities as of June 30, the end of its fiscal first quarter of 2021.

Canopy's revenue numbers are rising, with Q1 revenue up 22% year over year to CA$110 million. Medical marijuana sales in Canada and Germany drove the increase. I'm a fan of the new CEO's focus on cost reduction. David Klein, formerly the CFO at Constellation Brands, took the reins at Canopy in January, and since then has moved to reduce the company's selling, general, and administrative (SG&A) costs by shutting down unprofitable units. In April, Canopy exited operations in South Africa and Lesotho, closed some facilities in Canada, Colombia, and New York, and removed 85 full-time positions from its workforce. The changes helped reduce SG&A expenses by CA$10.3 million in Q1 to CA$135.4 million -- but it wasn't enough to bring in profits.

Canopy still hasn't been able to accomplish positive EBITDA (earnings before interest, taxes, depreciation, and amortization). It reported another quarter of EBITDA loss, this time CA$92 million, compared with CA$93 million in Q1 2019. As it works toward profitability, much of the company's strength lies in its innovative cannabis derivatives products, including vapes, edibles, concentrates, and beverages. Canada legalized these products in October 2019, and Canopy's offerings accounted for 13% of total Canada business-to-business sales that quarter. Its beverage products could bring gross margin above 40%, according to management.

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Aphria's consistent profitability is remarkable

Usually, CEOs holding a tight grip on expenses create remarkably profitable companies -- and Aphria is an excellent example. The company's wide range of medical and recreational cannabis products is sold under brand names including Aphria, Broken Coast, and Solei.

Aphria has been doing exceptionally well since Irwin Simon took over its CEO position in March 2019 after serving as the independent chair of its board of directors. Simon's objective as a leader has been to focus on the company's core market of Canada, which has proven beneficial in bringing in revenue and profits. The company has also benefited from a lack of the cash-burning aggressive acquisitions enjoyed by so many of its peers. As of May 31, the end of fiscal Q4 2020, it had CA$497.2 million of cash and cash equivalents on the books, which management plans to use for expansion.

Q4 marked an impressive fifth consecutive quarter in which Aphria recorded a positive EBITDA. Its consolidated adjusted EBITDA rang in at CA$8.6 million, a striking 49% hike from CA$5.7 million in the year-ago quarter. The company even saw an 18% rise in revenue from the year-ago period, to CA$152 million. Medical cannabis sales made up 13% of total revenue, while recreational contributed the rest.

When it comes to revenue, Aphria also holds an upper hand in the cannabis space. A year-over-year increase of 129% in fiscal 2020 brought the total to CA$543.3 million. Meanwhile, Canopy, with a market cap five times the size of Aphria's, saw its revenue jump by 76%, to CA$399 million, for the same period. Aphria's core market is Canada, but it has also extended into Germany, Italy, Malta, Colombia, and Argentina with its medical and recreational products. Its cannabis derivatives products, in particular its vape offerings, are doing well.

Which is the better buy?

Shares of Canopy and Aphria are down 23% and 14%, respectively, so far this year -- slightly better than the industry benchmark Horizons Marijuana Life Sciences ETF, which has fallen 28%.

APHA Chart

APHA data by YCharts

Things could get better for Canopy now that it has a new CEO who is focused on cutting costs, a good amount of cash on hand, and success in the derivatives space. But that could take awhile, and until the company posts a profit, it still carries risk. Among these two, Aphria is the better pick.

Aphria has shown its strength in the form of five consecutive quarters of profitability. It has also kept its balance sheet robust without the help of any external investment partners, while Canopy is strongly tied to Constellation. It's a wise choice to go with the marijuana stock that has proved its worth and shows the best prospects, and that's Aphria today.