Are you convinced it's time to give up on marijuana stocks? There's one that might be worth holding on to: Aphria (NASDAQ:APHA), which has consistently maintained its profitability despite the cannabis industry's (and the larger market's) struggles.

Aphria's ongoing profitability is impressive

High, consistent profits demonstrate how well a company is handling its operating expenses. Aphria has shown positive EBITDA (earnings before interest, taxes, depreciation, and amortization) over the past three quarters, while most cannabis companies reported negative earnings. In its recent fiscal third-quarter earnings, Aphria recorded a positive adjusted EBITDA of 5.7 million Canadian dollars.

While peers are burdened with debt or on the verge of bankruptcy, Aphria ended the quarter with CA$515.1 million of cash and cash equivalents. It also raised CA$100 million in equity capital to strengthen its balance sheet. The money will be put toward expansion in Canada and internationally, giving me faith in Aphria to survive the COVID-19 chaos.

Another point that caught my attention: Unlike other marijuana companies, Aphria hasn't had many layoffs. This is evidence that the company is not in a financial crisis — it doesn't need to cut down its workforce to conserve cash amid the COVID-19 pandemic. Aurora Cannabis (NYSE:ACB), Hexo (NYSE:HEXO), and Canopy Growth (NYSE:CGC) have all had to make significant workforce reductions in order to survive.

Why is leadership important in a growing industry?

The leadership team is the pillar of any company, and over the past year, those teams have crumbled at many major players, reflecting instability in the sector. Investors usually take it as a negative sign when a leadership team falls, and changes at the executive level can also affect the stock price of a company.

Look what happened to Aurora Cannabis after its CEO, Terry Booth, stepped down in February. The struggling company's stock price went crashing down after the announcement. Cannabis giant Canopy Growth also terminated its CEO, Bruce Linton, in June of last year after entering into its partnership with Constellation Brands (NYSE:STZ). Investors didn't take either move well — Canopy's and Aurora's stock prices are down 27% and 67% year-to-date, respectively, and neither has achieved positive EBITDA.

In Aphria's case, though, CEO Irwin Simon has changed the face of the company since taking on the role in 2019. In December 2018, Irwin joined Aphria as the independent chair of its board of directors. He took over the role of interim CEO in March 2019. Since then, Irwin has stressed that it would be wise for Aphria to focus on its roots — namely, the Canadian province of Ontario.

As mentioned, during Irwin's tenure as CEO, Aphria has repeatedly reported positive EBITDA. Irwin is the founder of Hain Celestial (NYSE: HAIN), which he ran as a successful packaged-food company for 25 years. This gives me confidence in Irwin's leadership, and I believe his experience and skills can take Aphria to greater heights.

Medical cannabis is one of Aphria's strengths

Consumer desire for medical cannabis is more evident than ever during the coronavirus pandemic; in fact, increased demand has forced many U.S. states and Canada to designate marijuana an essential item.

More consumers are beginning to understand the benefits of medical marijuana over conventional medicines — especially for severe medical conditions such as cancer, arthritis, Parkinson's disease, and many other neurological conditions. Data by Grand View Research shows that in North America, medical cannabis made up 71% of sales in 2019.

Aphria already has a strong presence with its medical marijuana operations in Canada, Europe, Africa, South America, and Oceania. Its Germany-based subsidiary, CC Pharma, saw a 50% increase in medical cannabis sales in the third quarter.

Aphria has a compelling product portfolio — both for medical and recreational use — under the brand names Solei, Aphria, Broken Coast, RIFF, and Good Supply. Its medical cannabis sales made up about 13% of the total in the third quarter, a 14% decrease from the previous quarter owing to a fall in average retail selling price.

The medical cannabis market is booming in the U.S. and worldwide, which will provide more opportunities for Aphria. As of now, 33 states and the District of Columbia have legalized medical marijuana. More states are in the process of legalizing medical cannabis this year if the pandemic doesn't slow them down. A Gallup survey showed that 86% of Americans see the medical benefits of marijuana as an important reason to support legalization. And Mexico could also legalize marijuana in 2020.

Cannabis 2.0: Not all hope is lost

There was a lot of hype about cannabis 2.0 products — edibles, extracts, and the like — before Canada legalized them last year. Don't get me wrong, there's still huge demand for these offerings. It's just that the timing wasn't right. These products were legalized in October, but regulatory issues and a delay in the opening of legal stores extended into 2020. And then the pandemic hit.

Aphria has captured a significant portion of the adult-use cannabis market. In its third quarter, recreational cannabis sales made up almost 70% of the total. (As mentioned, medical cannabis was about 13%; the remainder was wholesale.) For cannabis 2.0, Aphria in the process of developing high-quality vape products. We will also see high-margin derivative products — edibles, beverages, concentrates, and topicals — soon. Aphria says the production capacity at its Canadian cultivation facilities is as high as 255,000 kilograms a year.

The global legal cannabis market (both medical and recreational) rose 48% year-over-year to $15 billion in 2019. It could grow to as much as $73.6 billion by 2027, according to Grand View Research. In the U.S. alone, cannabis sales could grow by 38% this year, and while the U.S. medical cannabis market is currently larger, recreational cannabis could drive global market growth through 2024, according to Arcview Market Research.

That's why I think cannabis 2.0 products still have a chance to revive the industry once the coronavirus has retreated. For now, Aphria has suspended its guidance because of the uncertainty from the pandemic. But once things normalize, the growth from cannabis 2.0 products could drive Aphria's revenue and profitability. The company expects its vape products sales to show results in Q4 2020 and Q1 2021. Edibles and gummies will further drive sales in the later half of fiscal 2021.

Aphria: an intriguing cannabis bet

Marijuana is, no doubt, a growing industry — just look at the demand in Canada and the United States. Not every cannabis stock is worth buying, though, and even the more stable ones aren't completely safe. That said, if you are an investor who can handle the risk for a while, Aphria — with its strong financial footing and excellent leadership team — could bear fruit for you in the long term.