In 2019, the vast majority of licensed cannabis producers have been losing money at a time investors were expecting the profits to start rolling in. Among those with at least $20 million in annual sales, all but a handful reported losses in the most recent quarter. 

The Public Cannabis Company Revenue Tracker at New Cannabis Ventures currently lists just seven companies in North America with operations that squeaked out a profit during their most recent quarter. Here's how the top three performers have been able to make money while their peers report accelerating losses. 

Cannabis investors banking on profitability in the second half of the year may have another thing coming: More losses at best, and maybe a surprise stack of writedowns.

Although pot stocks have enjoyed a heady start in 2019 due to global marijuana legalization efforts and the burgeoning use of CBD as a wellness product, backers are starting to judge their investments by profitability instead of hype, and patience is wearing thin. Of the five largest Canadian pot companies, only Cronos Group Inc. is expected to report adjusted net income by the final quarter of the year, according to Bloomberg data.

Cannabis is a “young” industry that the Ontario Teachers’ Pension Plan is taking time to assess for potential investment opportunities, the outgoing president and CEO of the $191.1-billion fund manager says.

“We have to be mindful before we take these substantial sums of money that we have, and really push them into an industry [that’s] evolving,” Ron Mock told BNN Bloomberg’s Jon Erlichman on Thursday.

“We don’t have to be first ones in [cannabis]. We definitely can take our time and study it.”

It’s been a bad start to the week for the TSX, as energy, finance, gold, and the healthcare sectors all took a dive. The latter sector was weighed down by the plunge in CannTrust Holdings (TSX:TRST)(NYSE:CTST), which failed to live up to its name this week. The cannabis producer has been hit by a Health Canada audit that concluded the company had been running an extra five greenhouse rooms without a licence and put a kibosh on the estimated 5,200 kg of marijuana the company produced.

Although cannabis legalization is new to many countries and elusive to many more, the cannabis market is growing at an astounding rate. In the U.S. alone, approximately 7 per cent of Americans are using cannabidiol (CBD) for many purposes, which leaves room for the industry to grow to $16 billion by 2025.

Hexo Corp (TSX:HEXO) is testament to how quickly things can change in equity markets in general, and in an industry as volatile as the marijuana industry in particular. Just a few months ago, the firm seemed well positioned to become marijuana royalty. However, a round of disappointing financial results have played a critical role in dragging its stock price down.

Since late April, shares of Hexo are down about 40%. Still, there are several reasons why Hexo may still be worth considering. Let’s remind ourselves of two of these reasons.

Alberta is placing an unspecified amount of CannTrust products on hold as a precautionary measure, officials said, pending an investigation by Health Canada into whether cannabis from unlicensed facilities is safe for consumption.

The move by the Alberta Gaming and Liquor Commission (AGLC) comes after Ontario's cannabis distributor pulled CannTrust products from its site.

CannTrust Holdings Danish partner Stenocare says it also has quarantined medical pot products linked to illegal cultivation at the Canadian cannabis company's Ontario greenhouse.

Cannabis stocks have been some of the hottest investments to own in recent years, many including Canopy Growth (TSX:WEED)(NYSE:CGC) have generated incredible returns. Since going public in April 2014, Canopy has gained a whopping 1,620%, and despite growing concerns over the viability of the legal cannabis industry, there are signs of further growth to come.

As the rough ride endured by online retail behemoth Amazon.com demonstrates, there will always be hiccups for any company operating in an emerging industry. Even after the tech bust, global financial crisis, European sovereign debt crisis, and oil crash, it has returned over 116,000%, after allowing for stock splits, since its 1997 IPO.

Tilray has managed to successfully import its first bulk supply of medical cannabis oil into the UK.

For more than three years, the marijuana industry has been showing investors the green. Fortunate investors who bought into what are today's most popular pot stocks back in 2016 are likely up by a quadruple-digit percentage. And it's possible this could be just the beginning, with Wall Street calling for a fourfold to sixfold increase in worldwide sales over roughly the next decade.