What happened

After notching two straight days of gains, on Wednesday marijuana stocks again obeyed gravity by falling Earthward.

The catalyst was a steep quarterly net loss from Aphria (APHA), which not only pulled down that stock by 17% but also peers Aurora Cannabis (ACB -2.86%), Canopy Growth (CGC -10.13%), and Curaleaf (CURLF -0.21%), down a respective 9%, 4%, and 3% in late afternoon trading.

A hand gripping a marijuana plant.

Image source: Getty Images.

So what

Aphria's fourth quarter prominently featured a heavy bottom-line loss of 98.8 million Canadian dollars ($73.9 million). That's in stark contrast to the modest profit (CA$5.7 million, or $4.3 million) it booked in in the third quarter and far worse than analysts had estimated.

Although much of it was due to what are basically accounting moves (coronavirus-related impairment charges and a revaluation of convertible debentures), it starkly illustrates the persistent difficulty marijuana companies have in simply turning a net profit.

On top of that, Aphria filed the regulatory paperwork to float up to CA$100 million ($75 million) worth of new stock. Dilutive stock issues are all too common in the marijuana business, and like those constant bottom-line losses, investors are losing patience with them. 

Now what

There were positive aspects of Aphria's fourth quarter, such as better-than-expected revenue growth and a cash position that remains strong. But losses and dilution are what jump off the page when looking at the results. Aphria -- and the wider cannabis industry -- needs to get past these negatives to win favor with investors again.