The month of May has been a bad one for Canopy Growth (TSX:WEED)(NYSE:CGC). After an epic four-month rally, shares in the world’s biggest weed company started falling, reaching as low as $60 after flirting with $70 weeks earlier.

This isn’t the first time Canopy shares have tanked. Shortly after marijuana was legalized last year, weed stocks fell in a bear market that brought Canopy as low as $36.

A number of theories were offered to explain the Canopy selloff, including profit taking, weed supply shortages, and investor uncertainty, among others. However, in hindsight, the most likely cause was the simple fact that the TSX as a whole was crashing around the same time, and marijuana stocks got hit harder than others because of their volatile nature.

That was then, this is now. The bear market currently affecting weed stocks, and Canopy in particular, is hard to explain since the most recent quarterly reports show that recreational cannabis is indeed increasing sales. However, at least as far as Canopy is concerned, there are a few plausible theories that could explain why shares are tanking. We can start with one of the most obvious.

Hype train slows down

Weed stocks have always been driven by hype and publicity, with Canopy contributing more than its fair share of coverage. It was Canopy’s $5 billion Constellation Brands deal that triggered last summer’s weed rally, in which Canopy itself emerged the big winner.

Lately, however, there has been a lull in news from the company. The most recent announcement was the $343 million acquisition of a German producer. That’s a fairly large acquisition, but compared to last year’s M&A activity, it’s not really a big headline maker.

Aurora disappoints

Another factor that could be driving Canopy shares lower is the relatively weak performance of the company’s competitor Aurora Cannabis (TSX:ACB)(NYSE:ACB) in its most recent quarter.

Although Aurora grew revenue by 367% year over year and 21% compared to last quarter, the company’s earnings missed analyst estimates by a considerable margin. This casts doubt on whether weed companies can deliver the kinds of results that Wall Street wants to see, and that may have investors selling Canopy stock in anticipation of its own upcoming earnings.

Canopy’s upcoming earnings

Speaking of Canopy’s upcoming earnings, the company’s next quarterly report will come out next month. In it, investors will get to see whether the company manages to hold on to or even increase the recreational sales it earned in Q3.

This earnings report will be a big one for the marijuana industry, as some commentators have expressed skepticism as to whether recreational weed sales will remain strong after the initial novelty of legalization wears off. So far, we’re seeing mixed results. Canopy’s upcoming earnings should help to settle the matter once and for all.