What happened

Shares of Canopy Growth (NASDAQ:CGC), Cronos Group (NASDAQ:CRON), and Tilray (NASDAQ:TLRY) plummeted 28%, 20%, and 37% last month, respectively, according to data provided by S&P Global Market Intelligence. However, these popular cannabis stocks have gained back much of their losses so far in September.

So what

A host of factors have weighed on the cannabis industry in recent months. Regulatory delays in Canada, high tax rates in major U.S. markets such as California, compliance scandals, and cheaper illegally produced marijuana are just some of the challenges cannabis companies have had to contend with.

These obstacles have dented the operating results of the major marijuana producers -- so much so that Canopy Growth, Cronos Group, and Tilray will all likely lose money not just in 2019 but also in 2020.

Many investors appear to be losing patience with marijuana companies, and short-term-minded hedge funds have been bailing on cannabis stocks in recent quarters.

A volatile stock chart superimposed over cannabis plants.

Tilray, Canopy Growth, and Cronos Group have seen their stocks rebound sharply so far in September. Image source: Getty Images.

Now what

Yet thus far in September, many investors are becoming more bullish in their view of marijuana stocks.

Investment bank Seaport Global upgraded Canopy Growth's stock to buy from neutral and boosted its target price to $31 per share. Seaport Global analyst Brett Hundley cited Canopy's cash-rich balance sheet and valuable collection of cannabis-related intellectual property as reasons for his bullish outlook.

Cronos Group received praise from analysts at Bank of America for its acquisition of several of Redwood Holding Group's subsidiaries, which will give it control of the Lord Jones brand of cannabidiol (CBD) beauty products. BofA analyst Christopher Carey said it could be the first of many acquisitions for Cronos in the fast-growing CBD space.

Tilray, meanwhile, saw its shares rise even when a Wall Street analyst cut her target price for its stock. Cowen analyst Vivien Azer slashed her price target from $150 to $60, due in part to supply constraints in Canada that are stifling Tilray's growth. Yet Azer believes Tilray could still outperform other cannabis stocks from this point forward due to its efforts to boost production, new retail store openings in Canada, and the company's intriguing opportunities in international markets. That's why, even at its significantly reduced level, Azer's new $60 price target still represents approximately 100% upside from Tilray's current price.

All told, Cronos Group, Canopy Growth, and Tilray have seen their stocks rise 5%, 16%, and 20%, respectively, so far this month. And if they can prove to investors that they can capture a larger share of a cannabis industry that could one day generate $200 billion in annual sales, more gains may still lie ahead.