Over the next decade, one of the most lucrative investment opportunities might just be marijuana stocks. That's because this is an industry that could see global sales catapult from $12.2 billion last year to perhaps between $50 billion and $75 billion by the end of the next decade, according to various Wall Street estimates.

But whereas opportunistic and iron-stomached retail investors have been giving pot stocks a chance for years, it's only been within the past couple of quarters that Wall Street's top money managers have nibbled on pot stocks.

A man in a suit pressing the sell button on a digital board.

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Prominent investment funds and hedge funds sold these marijuana stocks in Q1

Aside from the teething pain that can be expected with any nascent industry, prominent Wall Street investment funds and hedge funds simply haven't wanted to purchase companies listed on over-the-counter exchanges. That means there have been only a small handful of marijuana stocks for money managers to choose from on the New York Stock Exchange or Nasdaq.

Today, there are 10 pot stocks listed on the NYSE or Nasdaq, one of which just IPOed last month. Of the remaining nine, three uplisted between late December and late February. That means just six big-name pot stocks have been available for Wall Street's top money managers to add, or sell, over the past couple of quarters.

It so happens that this past week -- May 15 -- was also the deadline for investment funds and hedge funds with more than $100 million in assets under management to file Form 13-F with the Securities and Exchange Commission. Form 13-F discloses a fund's holdings as of the end of the previous quarter -- in this case, March 31 -- which allows Wall Street and investors to see what the biggest money managers have been buying and selling.

With that in mind, I perused the longest-tenured NYSE- and Nasdaq-listed pot stocks on 13F aggregator website WhaleWisdom and found that money managers sold off three of the most popular marijuana stocks in the first quarter.

An up-close view of flowering cannabis plants growing in an indoor setting.

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Canopy Growth

According to Q1 data from WhaleWisdom, the largest marijuana stock in the world by market cap, Canopy Growth (NYSE:CGC), was one of the pot stocks on money managers' chopping blocks. Compared with the other two pot stocks on this list, however, the selling by institutional investors was pretty minimal.

All told, the aggregate number of shares 13-F filers held as of March 31 was 27.572 million, down 3.43% from the end of the fourth quarter. Almost three times as many funds created new positions in Canopy Growth or added to an existing position than closed out their positions or reduced their stakes. We also saw hedge fund ownership rise nearly 15%.

So why sell the most prominent pot stock on the planet? One possibility is Canopy's huge first-quarter gains. Pretty much the entire cannabis industry did well in Q1, including Canopy, which rallied 61% by March 31. Marijuana stocks tend to be volatile, and next-big-thing investments have a tendency to undergo wild share-price swings. Locking in some gains after an exceptionally good quarter might have been palatable to institutional investors.

Another reason to sell could be the company's intermediate-term financial outlook. Although it'll probably slide in as the second largest producer in Canada by peak annual output, the company's costly growth strategy, which includes expanding into foreign markets, is expected to keep it in the red through at least 2020. With some cannabis stocks already turning the corner on profitability, investors may not be willing to support a $16 billion valuation for a company still quite a-ways from delivering the green.

A hand reaching for a neat stack of cash in a mouse trap.

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Aphria

Another big-name pot stock that saw even more selling from institutional funds in the first quarter was Aphria (NYSE:APHA). According to WhaleWisdom, the aggregate 13F holdings as of March 31 were 21.1 million shares, down 18.67% from the previous quarter. However, similar to Canopy, the number of newly created and added positions easily outnumbered the number of institutions that closed or reduced their positions.

Also like Canopy Growth, an early-year rally might be one reason Wall Street chose to head for the exit. Having begun the year under $6 a share, Aphria's stock rallied to nearly $11 only five weeks later. Considering the volatility of the industry, locking in profits would have been considered prudent for a number of prominent money managers.

However, the bigger reason for the increase in pessimism might have to do with the short-seller allegations Aphria faced in early December. The duo of Quintessential Capital Management and Hindenburg Research alleged that Aphria grossly overpaid for its Latin American assets. Although an independent committee found the price of these assets to be reasonable, the company nevertheless took a CA$50 million impairment charge against the carrying value of its Latin American assets in its most recent quarter. That further hurt investor trust in Aphria's management team.

Speaking of management, Aphria also had its longtime CEO, Vic Neufeld, step down, following findings from the independent committee that certain directors may have had conflicts of interest in the Latin American asset purchase. With investor trust broken, Aphria has been rightly struggling over the past couple of months.

A Canadian flag with a cannabis leaf instead of a maple leaf, and a large stamp across the flag that says, Sold Out.

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Tilray

But when it comes to Wall Street's punching bag in the first quarter, that title belongs to Tilray (NASDAQ:TLRY). After rocketing higher for two months following its mid-July initial public offering, Tilray has vastly underperformed its peers ever since. In the first quarter, institutional funds that filed a 13-F reduced their holdings in the company to 1.986 million shares, down 73.05% from the end of the previous quarter. Ouch!

But as was the case with Canopy and Aphria, more funds opened or added to an existing position than closed or reduced their position, but hedge funds sold nearly 90% of their stake in Tilray during the quarter.

Why is there such pessimism surrounding Tilray? To begin with, the company isn't expected to be profitable anytime soon. Despite having well-known medical marijuana brands in Canada, and having little trouble reaching in the neighborhood of a dozen overseas markets, Tilray is no closer to profitability than it was at this time last year.

Tilray's long-term strategy has also left many investors scratching their heads. In March, CEO Brendan Kennedy essentially threw in the towel on Canada and announced that much of Tilray's ongoing investments would now go toward entering the U.S. market and expanding into Europe. Although these are larger markets, based on peak sales potential, it's an odd decision to make, with the Canadian adult-use industry just ramping up.

And perhaps the icing on the cake is Tilray's anemic gross margin, which hit 20% in the fourth quarter and 23% in the recently reported first quarter. Having to buy third-party premium cannabis has left Tilray at a margin disadvantage to its peers.