What happened

Shares of Aurora Cannabis (NYSE:ACB) were sinking 10.9% as of 10:58 a.m. on Thursday. The Canadian cannabis producer announces its fiscal 2020 first-quarter results after the market closes today, and investors appear to expect bad news from that update after Aurora's peer, Canopy Growth (NYSE:CGC), reported horrible results from its recent quarter before the market opened today.

So what

There certainly are some reasons to anticipate that Aurora's Q1 update won't be pretty. Canopy Growth posted revenue that was much lower than expected and a net loss much worse than expected in its fiscal 2020 Q2 results announced this morning.

Shadow of maple leaf on top of a pile of cannabis leaves

Image source: Getty Images.

Canopy specifically mentioned that Canadian provinces "have reduced purchases to lower inventory levels" and that "retail store openings have fallen short of expectations." OrganiGram also referenced these issues in its dismal preliminary fourth-quarter update earlier this week. Aurora won't be immune to these problems.

On the other hand, some of Canopy's woes were self-inflicted and shouldn't impact Aurora. For example, the company took a huge restructuring charge related to product returns for cannabis oil and softgel products. Aurora hasn't encountered similar issues so far.

But a rising tide lifts all boats, and an ebbing tide lowers them. The tide certainly isn't rising at this point for Canadian marijuana stocks. All signs pointed to a less-than-rosy update from Aurora Cannabis later today.

Now what

It won't be long before we know exactly how Aurora Cannabis fared in its latest quarter. It's important to remember, though, that regardless of what the company reports, any quarterly update is only a snapshot of what has already happened. While the environment is challenging for the cannabis industry right now, more Canadian retail stores are opening, and the cannabis derivatives market will kick into full gear in 2020.