What happened

After tumbling on Friday following a lousy earnings report from Canopy Growth (CGC -1.71%), shares of fellow Canadian marijuana stocks Tilray (TLRY -1.13%) and Aurora Cannabis (ACB -2.48%) -- and Canopy Growth, too -- are rebounding sharply today.

As of 11:30 a.m. ET, Tilray shares are gaining 10.2%, Aurora is up 12.3%, and Canopy Growth is doing best of all, jumping 16.4%.

So what

There's no obvious good news driving today's rally. The opposite is more accurate, with investment bank Piper Sandler coming out with a lower price target on Canopy -- $2.50 per share, down from $3 previously -- and an underweight rating to boot.

Indeed, in apparent contradiction to optimistic reports about Tilray last week, Piper Sandler is believes that the Canadian cannabis market is still under "pressure," reports The Fly. Sales at Canopy Growth fell 19% year over year in last week's fiscal Q1 report. Gross profit margin turned negative -- versus a 20% profit margin a year ago -- suffering from both "lower production output and price compression." And free cash flow became increasingly negative as well -- an "outflow" of $143 million, said management.  

Thus, it appears that Canopy's "deliberate business transition to focus on higher margin, premium and mainstream products" is not working out as planned. By extension, that implies it's not a viable way forward for Aurora or Tilray, either.

Now what

So why are investors bidding up marijuana stocks today in the absence of any change in last week's bad news, or of any new good news this week?

That's hard to say. Perhaps what we're seeing is a simple closing of short positions as investors who bet against Canopy and its cohorts last week buy back and return the shares they shorted to lock in their winnings. Alternatively, investors may be giving more credence to Tilray CEO Irwin Simon's assertion that "the U.S. is a $100 billion opportunity in cannabis." According to the CEO, 93% voter support for legalized medical marijuana in the U.S., along with 63% support for recreational pot, strongly suggests that legalization will come to the U.S. eventually.  

Problem is, in support his thesis, Simon cited Canada as an example of "the only country where adult-use cannabis is legal." However, Aurora, Canopy, and Tilray have not yet succeeded in parlaying that legal Canadian marijuana market into profits, even after years of trying. So while I agree with the CEO that legalization will probably happen in the U.S. -- and perhaps sooner than we think -- so far the data simply doesn't support the argument that legal weed will be the same thing as profitable weed for the marijuana companies.

With analysts continuing to warn that none of these Canadian pot companies has a chance of turning a profit before 2026 at the earliest, investors may be best advised to use today's spike in share prices as an opportunity to exit this sector -- not to buy more.