Over the brief span of its life, the cannabis industry has suffered through many difficult periods. Last week was the latest, and one of the toughest. Some observers and investors might consider it the toughest since the inception of this youthful industry.

Five notable marijuana stocks reported earnings over the week. None impressed the market with its performance. And that's putting it mildly. Let's elaborate.

Wilted marijuana plants.

Image source: Getty Images.

An earnings season to forget

In a blast of earnings reports, sector majors Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) all delivered their latest quarterly figures. A bit down the ladder, small Aleafia Health also reported.

Unfortunately for anyone looking to make some green with these green stocks, to understate the case, none of these quarterlies were particularly encouraging. At certain points, in fact, they were kind of scary.

Canopy Growth's Q2 of fiscal 2020 saw a decline in net revenue on a quarter-over-quarter basis, exactly the opposite of the typical trajectory for pot stocks lately. Net loss across the same stretch of time deepened to almost CA$375 million ($283 million). Both Q2 line items missed the average analyst estimates by a country mile.

Doing a convincing imitation of Canopy Growth, Aurora also posted an unhappy quarter-over-quarter revenue decline, by 24% in its case. Speaking of declines, its volume sales went south by 30%.

Aurora did post a profit, but it was (1) small, at just shy of CA$13 million ($10 million), and (2) because of a nearly CA$144 million ($109 million) unrealized gain on derivative liability -- basically an accounting quirk with little bearing on actual performance.

Thankfully Tilray bucked this revenue downshifting trend, lifting its top line by 11% in its Q3 compared with the previous quarter. That even beat the average analyst estimate, a rare feat for the companies reporting this week.

Tilray is still notably in the red, but at least its Q3 net loss was only slightly worse than the Q2 result. Meanwhile, it's doing well in the international medical cannabis segment, and its recent acquisition, hemp producer Manitoba Harvest, is contributing decently to revenue and widening the product range.

Another top-line grower was Cronos, with a 24% improvement in gross revenue in its Q3. Said improvement, however, didn't quite hit analyst expectations. In addition, Cronos was in the black to the tune of nearly CA$790 million ($597 million) on the bottom line, but this was strongly aided by a CA$835 million ($631 million) revaluation of derivative liabilities -- essentially an accounting modification. Does that sound familiar? 

Finally, Aleafia fulfilled its pledge to book the first profitable quarter in its brief existence; the company netted CA$1.86 million ($1.41 million) on CA$5.29 million in revenue in its Q3. The latter figure, by the way, put it in the Top-Line Growth Club, as it bettered the Q2 number by 34%.

Yet Aleafia is fresh off a divorce with Aphria, which at one point was a crucial supplier to the former's subsidiary Emblem. Aleafia's pile of cash and other liquid assets is also diminishing, albeit not yet to an alarming level. Plus, the company says most of its currently planned capital expenditures are at or near completion.

Losing their potency

Although not every line item with the quintet of reporting companies represented a decline or other form of disappointment, there were enough negative developments to warrant concern. All five stocks declined at double-digit rates over the week:

ACB Price Chart

ACB Price data by YCharts

The drops are even more pronounced if we stretch out the start of our time frame to the beginning of 2019. They range from Cronos' nearly 40% decline to a headache-inducing 72% for Tilray.

Those are some serious falls. Yet these weakened prices could open good buying opportunities for bullish investors looking to snap up the better-potential marijuana stocks at attractive discounts. Keep in mind that cannabis legalization, while slow, is rolling along -- for example, Canada just sanctioned sales of derivative products in its "Cannabis 2.0" round of legalization

We should also bear in mind that, despite this dark storm of generally bad earnings news, the industry as a whole is on an upswing. Global legitimate cannabis sales more than tripled between 2014 and 2018, according to a thorough study by Arcview Market Research and BDS Analytics, and are projected to repeat the feat in the 2018 to 2023 span.

So for those who continue to believe in the sector, investing in some of the scrappier operators -- Aleafia is not a bad example -- while the sector's in disfavor could reap big returns in the years to come.