Aurora Cannabis (ACB) is one of the top marijuana stocks in Canada. It has fallen behind both Tilray (TLRY -2.19%) and Canopy Growth (CGC -1.25%) in terms of revenue, but it's still a relatively big player in the pot market up north. However, with the company reporting yet another lackluster period this week with respect to revenue growth, it could fall further behind, especially as marijuana producer Hexo (HEXO) has been trying to grow via acquisitions.

Investors should also pay attention to another company that could soon be on Aurora's heels as well: Village Farm International (VFF 0.94%).

A person using a microscope in a greenhouse.

Image source: Getty Images

Cannabis isn't a big part of Village Farms' revenue — yet

Village Farms is much more than just a pot stock. Its produce business is sufficiently larger than its cannabis operations. With revenue of $45.5 million in the company's latest quarter (period ending June 30) coming from produce, that's 84% more than the $24.8 million in sales that Village Farms generated from cannabis. In total, its top line of $70.4 million for the period is more than Aurora Cannabis has reported in each of its past two periods (roughly around $43 million). 

If you're looking at total revenue, Village Farms already has Aurora beat. But in terms of strictly cannabis-related revenue, it may take some time for Village Farms to bridge the gap. However, because Aurora showed no revenue growth in its recent results released this past week (also for the period ending June 30), that gap could close sooner rather than later. Village Farms, meanwhile, has been growing at a great pace. Last quarter, its cannabis revenue grew by 42% from the first quarter, when sales were $17.5 million.

Why 2022 could be an even bigger year for Village Farms

Village Farms' cannabis revenue could soon get even bigger. In July, the company announced that Pure Sunfarms (its cannabis operation) had received an amended cultivation license from Health Canada that would allow it to increase its production capacity by 50%. That could come online as early as next year. Plus, Village Farms announced in August the acquisition of a cannabidiol (hemp-derived) company in Colorado, Balanced Health Botanicals, which it estimates will bring in at least $30 million in annualized revenue next year, which would equate to a little less than $8 million on a quarterly basis. The company's mot recent acquisition announcement came on Sept. 28, when the company shared it had acquired an 80% stake in Leli Holland, a cannabis company that operates in the Netherlands. The first ever legal recreational market in Europe is expected to call the Netherlands home within the next four years.

The gap in quarterly cannabis revenue between Aurora and Village Farms currently sits at less than $20 million. Between the added sales from the new acquisition, organic growth, and more production next year, I'd be willing to bet that, at some point in 2022, Village Farms will overtake Aurora in cannabis-related revenue. Although critics may argue that Aurora could generate growth of its own and won't stay at its current level, the company has failed to generate growth even as the Canadian pot market has been expanding in size, hitting record levels in July.

Now that Aurora is focusing on shedding costs, revenue growth could take a backseat for the time being as it tries to post an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) profit — something Pure Sunfarms has done for 11 straight quarters.

Either way, Village Farms is the better option

Village Farms overtaking Aurora in cannabis-related revenue would signify that the company is one of the top marijuana producers in Canada. It wouldn't necessarily make Village Farms a better buy (it is already a sound investment), but the danger for Aurora is that it would be yet another company leapfrogging it in the standings. It may seem like ancient history now, but a few years ago, before Canada legalized recreational marijuana in 2018, Aurora and Canopy Growth were the top two pot stocks in the country. Those days are long gone, and now Aurora is struggling to not just stay out of the red but also to increase its revenue. It's quite a different story for Village Farms, which has a flourishing business right now and is only getting stronger as it expands its marijuana operations.

Even if you don't think Village Farms will catch up to Aurora next year in cannabis revenue, odds are that, over the long term, it eventually will. More importantly, however, with a strong bottom line and good growth numbers, Village Farms is a much better (and less risky buy) than Aurora, and I'd be surprised to see that change — ever.