Is the U.S. going to legalize marijuana in the near future? I wouldn't count on it because legislation usually takes a long time, especially on such a large scale. But, if it does happen, it could be years away.

But that doesn't mean it's too early to invest in pot stocks that could benefit from legalization. The key is being patient and finding a business with strong enough financials and resources to hang on for the long run. Two stocks of well-funded companies in good positions to still be around in a few years are Canopy Growth (CGC 2.81%) and Cronos Group (CRON 0.00%). But which of these cannabis producers is the better buy right now?

The case for Canopy Growth

Canopy Growth has a healthy balance sheet thanks to the $4 billion investment that brewer Constellation Brands made in the cannabis company in 2018. Even though the company has been burning through cash since then, its financial position remains strong. As of the end of June, Canopy reported cash and short-term investments totaling 1.2 billion Canadian dollars ($868 million).

The company's growth has stalled of late (net sales were down 19% for the period ending June 30), but Canopy is banking on its future in the U.S. market. It has been positioning itself for those opportunities through pending deals with multi-state operator Acreage Holdings and edibles maker Wana Brands that it can execute upon legalization.

For now, Canopy Growth is working on improving its financials so that if and when the opportunity arises to expand into the U.S. pot market, it will have strong resources behind it.

The company said in its most recent earnings report that it expects "cost savings to ramp in the second half of the year, enabling us to execute on our path to profitability." For the period ending June 30, the company's adjusted loss based on earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled CA$75 million.

Year to date, the stock has fallen 71% and has underperformed the Horizons Marijuana Life Sciences ETF, which has fallen by 52% over the same period. But at 2.6 times revenue, the stock trades at a much cheaper valuation than Cronos, whose investors are paying a multiple of nearly 11 times sales.

The case for Cronos Group

Cronos is also sitting on plenty of cash. It reports its financials in U.S. dollars, and as of the end of June, its cash and short-term investments totaled just under $945 million. In 2018, tobacco giant Altria took a 45% stake in the business by investing $1.8 billion.

Although Cronos isn't one of the larger cannabis producers in Canada (it has generated less than $100 million in revenue over the trailing 12 months), that could work to its advantage. Having more-modest operations means less money is needed to fund them and thus less cash burn. Over the trailing 12-month period, Cronos has used up $118.6 million to fund its operations. At that rate, its current cash balance could easily last several years.

By comparison, Canopy Growth has burned through CA$140.5 million ($101 million) over just its most recent three-month period.

Cronos has been moving to position itself for expansion in the U.S. market as well. Besides its partnership with Altria, the company sells hemp-derived cannabidiol products at hundreds of Ulta Beauty locations in the U.S. Last year, it also announced that it acquired the option to take a 10.5% stake in PharmaCann, a multi-state operator in the U.S.

Year to date, shares of Cronos have fallen by 31%, proving it to be a less risky buy than Canopy Growth.

Why I'd go with Cronos

Cronos' more muted strategy could pay off in the long run. Canopy Growth has been overly aggressive in its pursuit of growth over the years, and that now has management looking to slash costs wherever it can. Most recently, the company announced it would be divesting its Canadian retail operations, which was once a key part of its long-term strategy. 

If legalization doesn't come soon, Canopy Growth might need to pursue even more drastic cuts to keep its cost burn more manageable. The company is arguably banking too much on the U.S. market right now for future growth. I'd avoid it since it's a riskier buy than Cronos.