With Aurora Cannabis Inc. and Canopy Growth Corp. reporting earnings in the coming days, investors should watch closely for losses due to their investments in other weed companies.

Recreational cannabis legalization began Oct. 17 in Canada, and despite the federal government’s public statements, in the intervening months, the country is grappling with massive supply shortages, according multiple people running companies or working in the sector. Provinces have blamed the licensed cannabis producers for the lack of available product, yet the weed producers have said that the shortage and weak September-quarter earnings are a result of licensing backlogs and provincial buyers placing small orders.

The uncertainty surrounding early returns and supply-chain difficulties have weighed on pot stocks, along with doubts about their outsize valuations.

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Since Oct. 17, ETFMG Alternative Harvest ETF MJ, -2.53% has dropped 11%, Horizons Marijuana Life Sciences Index ETF HMMJ, -2.58% has fallen 14%. After a more than 600% gain on its stock since going public, Tilray Inc. TLRY, -0.94%  dropped about 40%, Canopy Growth CGC, -3.11% WEED, -3.40% has fallen 9.8%. Unlike many of its rivals, Cronos Group Inc. CRON, -8.73% CRON, -8.28%  has performed well, nearly doubling after it announced that Altria Group Inc. MO, +0.25%  had taken a $1.8 billion stake in the company.

The downturn could be a problem for Aurora ACB, -2.32%  , ACB, -3.40%  especially, which has said it expects sales of C$50 to C$55 million ($37.6 million to $41.4 million) and reports Monday before the opening bell. While Aurora’s portfolio of pot stocks generated large profit in September-quarter results, it could report massive losses this time around because of the sector’s descent and its specific holdings.

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Cronos aside, the pot stock drop is going to be a especially serious for Aurora, because one of the company’s largest investments is in Green Organic Dutchman Holdings Ltd. TGOD, +0.00% TGODF, -1.45% which gave up its gains from earlier in the year while losing roughly 40% of its value. In a note published late Thursday, Harvest Moon Cannabis Co. CEO Robert Doxtator wrote that he estimates Aurora’s portfolio losses at C$425 million for the December quarter.

But the losses will be “on paper” losses and don’t directly affect Aurora — and others’ — ability to produce and sell pot.

Analysts polled by FactSet on average project losses of C$0.6 cents a share on sales of C$51.8 million for Aurora. Note there are only two analysts contributing those estimates, which can make the consensus unreliable. Overall, six analysts cover Aurora with an average target price of C$12.09 a share, which represents a 21% upside from Thursday’s closing price. Four have a buy rating, one rates it a hold and one analyst has a sell rating.

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Canopy Growth, the world’s largest pot company by market value, reports Thursday after the close. Canopy’s profits may also suffer from the overall sector decline, since it holds a substantial portfolio of public companies, as does its publicly traded venture-capital arm, Canopy Rivers Inc. RIV, -6.52% CNPOF, -6.22%

Analysts expect Canopy Growth to report losses of C$0.17 a share on sales of C$84.7 million, according to FactSet. Ten analysts cover the name, nine of which have a buy rating; one rates Canopy a sell. The average price target is C$70.70, which is a 17% upside from Thursday’s closing price.

The considerably smaller Supreme Cannabis Co. Inc. FIRE, -16.74% SPRWF, -11.52%  will report Tuesday before the open. Tilray and Cronos have not announced their earnings dates.

Aphria Inc. APHA, -1.46% APHA, -2.68%  , which is the target of a hostile takeover bid, and Organigram Holdings Inc. OGRMF, -6.27% OGI, -6.94%  reported results in January.