What happened

Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (CGC -0.30%), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (TLRY -1.68%) dropping 15%, and Aurora Cannabis (ACB 0.62%) getting smoked for a 16% loss. As the new week gets underway, however, these marijuana stocks are lighting back up.

Through 10:20 a.m. ET, all three stocks are back in the green today, with Canopy gaining 4.9%, Aurora up 5.8%, and Tilray leading the pack higher with a 6.7% gain.

So what

Why are marijuana stocks in the green today? That's actually an excellent question, because the newswires are mostly lacking clearly great news for cannabis.

Oh, it's not entirely crickets out there. According to Marijuana Moment, a move by Wisconsin governor Tony Evers to permit citizen voting on referenda could make it easier to pass marijuana legalization in that state. At the federal level, senator and onetime presidential candidate Cory Booker continues to advocate for marijuana reform, arguing that "a majority of Americans on both sides of the aisle [are] in support of legalization."  

Probably the biggest news is that Canada -- arguably the country that kick-started the international movement to start decriminalizing marijuana -- is launching a project to "review" its groundbreaking Cannabis Act to ensure the local legislation up there "meets the needs of all Canadians while continuing to displace the illicit market," according to Health Minister Jean-Yves Duclos. But statements by government officials regarding a desire to strengthen the law are subject to interpretation. "Strengthen" could as easily mean "tighten regulations" as it could mean expanding access to marijuana in Canada.  

For that reason, I can't say that the Canadian law, either, is an obvious catalyst for today's price moves among marijuana stocks.

Now what

More likely, therefore, what we're seeing today is a simple "bounce" -- whether of the "dead cat" variety or not -- in stock prices after last week's sell-off. With all three of the biggest-name marijuana stocks trading at inflation-adjusted penny stock levels -- less than $3 a share for Canopy and Tilray, and barely a buck a share for Aurora -- investors may simply be thinking that marijuana stocks are too cheap to resist.

If you ask me, though, that's a dangerous attitude to take to marijuana stocks -- or any stocks.

Whether a stock is "cheap" or not, remember, is not a function of its stock price alone, but of its stock price divided by its earnings -- its P/E ratio. And Aurora Cannabis, Canopy Growth, and Tilray are not currently profitable. For that matter, according to analysts polled by S&P Global Market Intelligence, none of these stocks will even become profitable before 2026 at the earliest.

Until marijuana stocks figure out a way to earn a profit, I can't consider them "cheap" at any price.