Thursday morning brought more losses to Wall Street as investors continued to react negatively to a rising chorus of downbeat assessments of the global economy's near-term future. Several well-respected institutional investors have warned that the optimism from the market's rebound from the coronavirus bear market might not be warranted, especially in light of further weakness in employment. As of just after 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 89 points to 23,159. The S&P 500 (SNPINDEX:^GSPC) fell 17 points to 2,803, and the Nasdaq Composite (NASDAQINDEX:^IXIC) dropped 85 points to 8,778.

Cannabis investors have largely been disappointed with the performance of marijuana stocks during the past several months. Just like consumers hoarded toilet paper and other necessities, some shareholders in cannabis companies had expected to see rising demand from customers stuck at home. However, even if that's been the case, it hasn't translated to gains for major cannabis producers. The ETFMG Alternative Harvest ETF (NYSEMKT:MJ), for example, has lost more than 30% of its value in just the past three months.

One marijuana leaf prominently centered on a pile of other leaves.

Image source: Getty Images.

No success with Aurora's reverse split

One of the worst performers in the marijuana space lately has been Aurora Cannabis (NASDAQ:ACB), which is down by 66% since mid-February. The Canadian cannabis company that many had previously seen as one of the darlings of the industry has run into persistent operational problems, and the timing of the coronavirus pandemic introduced new challenges to its expansion plans that forced it to retrench.

Things got so bad for Aurora that its share price dropped below the $1 mark, and that forced the company to do a 1-for-12 reverse split. Such moves are designed to boost the share price, but they result in investors having fewer shares after the reverse split. That has thus far preserved Aurora's right to keep trading on the New York Stock Exchange, but the stock has continued to lose ground. The share price is down another 25% just this week following the reverse split, showing the danger of such moves in hurting confidence among investors.

More ugly earnings ahead?

Investors are also unhappy about what they've seen from earnings lately. Tilray (NASDAQ:TLRY) reported its first-quarter results earlier this week, and they included sales that more than doubled from year-ago levels and a tripling in international revenue from medical marijuana. However, losses were much larger than shareholders had expected.

Now, some of those watching the marijuana industry think that the stockpiling argument might actually backfire on pot companies. If people stocked up on pot at the beginning of lockdown measures, sales might be reduced now as buyers work their way through their saved-up stashes.

Moreover, cannabis retail locations are facing the same challenges as other stores, including the need to address coronavirus-related safety issues. Many stores have reduced hours or shut down entirely, and having to comply with heightened state and local requirements could pose further problems for pot stores to solve.

There's even a crisis of confidence in the executive suite at some companies. Canopy Growth (NASDAQ:CGC) COO Andre Fernandez and chief commercial officer Dave Bigioni have left the company, joining a host of others who faced layoffs, furloughs, and other measures.

Some had hoped that cannabis stocks would be a port in the storm during the coronavirus crisis. However, that hasn't proven to be the case, and it could take major positive developments for investors to have any real hope of a turnaround in the near future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.