If there is one sector that still looks incredibly risky, it’s cannabis. Cannabis stocks run on thin margins and thinner patience. Canada legalized the product, but it also created a crowded shelf where price wars feel normal. The big United States payoff keeps arriving “soon,” which pushes companies to spend ahead of clarity.
Investors also face dilution, surprise write-downs, and rule changes that can hit sales overnight. When a sector needs fresh capital to keep moving, a weak quarter can snowball fast and punish even confident investors. That’s why today, I’d stay away from these two risky cannabis stocks.
WEED
Canopy Growth (TSX:WEED) sits near the centre of that storm. It sells adult-use and medical cannabis in Canada, it aims for growth in international medical markets, and it owns Storz & Bickel, a vaporizer device business. Over the last year, it tried to trade drama for discipline. In early January 2026, it announced a recapitalization that refinanced debt and pushed maturities out to at least 2031. In December 2025, it also agreed to buy MTL Cannabis, a Quebec producer, to deepen its medical footprint and add scale.
The latest earnings show progress, but also fragility. In its second quarter (Q2) fiscal 2026, Canopy reported consolidated net revenue of $67 million, up 6% from a year earlier. It also logged an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $3 million, which improved from the prior year but stayed negative. Management pointed to lower overhead and tighter spending, and the operating loss narrowed. Investors should still remember that a turnaround needs repeatable demand, not just one cleaner quarter.
The near-term outlook gives Canopy both a path and a trap. The cannabis stock wants more Canadian adult-use growth from formats like infused pre-rolls and all-in-one vapes, and it needs smoother European medical execution after supply hiccups. It also warned that tariffs could pressure the device business in some markets. Those factors can move the cannabis stock in either direction, and the market cap near $593 million leaves little room for missteps. If the MTL integration drags or if pricing pressure returns, the company may slip.
ACB
Aurora Cannabis (TSX:ACB) looks steadier, but it still carries real downside. It focuses on global medical cannabis and treats Canadian consumer cannabis as a secondary lane. Over the last year, it leaned harder into that strategy and sold the story of high-margin medical supply with global reach. It also swatted down online misinformation in June 2025 about a supposed acquisition it never pursued. That episode sounds minor, but it shows how fast sentiment and headlines can whip around in this space.
Aurora’s latest quarter explains why optimists keep giving it another chance. In fiscal Q2 2026, it delivered total net revenue of $90.4 million, up 11% year over year. It also grew adjusted earnings before interest, taxes, depreciation, and amortization by 52% to $15.4 million. Medical cannabis drove most of the results, and management highlighted strong pricing and cost work that kept medical margins very high. The cannabis stock also emphasized a largely debt-free cannabis business, which matters when credit tightens.
Even here, the risks stay loud. Aurora relies on international medical growth to keep the engine humming, and it needs clean execution across multiple regulators and supply chains. Management expects 8% to 12% year-over-year growth in global medical cannabis net revenue in fiscal Q3 2026, which sets a clear bar.
Bottom line
So, yes, these two cannabis stocks could send a $100,000 investment to $0. Both names still operate with narrow room for error, and both sit in a sector that punishes mistakes with dilution and deep drawdowns. A tough pricing year, an execution slip, a regulatory setback, or a return to heavy cash burn can crush the share price and keep it down for years. A rebound can happen, but an investor should treat either pick like a speculation, size it small, and demand a thesis that survives a bad quarter for anyone.
