Cannabis stocks were mostly lower Wednesday, weighed down by pressure in the broader markets after the yield curve inverted and a steep selloff in Tilray shares following earnings.

The Dow Jones Industrial Average

DJIA, -2.45%

 was down more than 500 points at last check, after the U.S. 2-year Treasury note yield traded above the 10-year note yield for the first time in more than a decade, bolstering recession fears. An inverted yield curve, in which it’s more expensive to borrow in the short term than the longer term is viewed as a harbinger of recession.

“The equity market is on borrowed time after the yield curve inverts,” strategists at B. of A. Merrill Lynch wrote in a note to clients this week.

The news weighed heavily on cannabis exchange-traded funds. The Horizons Marijuana Life Sciences ETF

HMMJ, -5.90%

 was down 4.8%, with 48 of its 54 constituent stocks losing ground. The ETFMG Alternative Harvest ETF

MJ, -5.58%

 was down 4.7%, with all 32 of its constituent stocks falling.

Tilray shares

TLRY, -12.93%

 fell more than 12% after the company posted wider-than-expected quarterly losses that outweighed better-than-expected revenue, with the stock failing to find support from a mostly bullish analyst response to the numbers. The Canadian company trades on Nasdaq.

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Tilray posted a net loss of $35.1 million, or 36 cents a share, versus losses of $12 million, or 17 cents a share, in the year-ago period. Revenue including excise taxes rose to $45.9 million from $9.7 million in the year-ago period.

Removing excise taxes of $3.9 million, Tilray reported revenue of $42 million. Analysts surveyed by FactSet had estimated losses of 28 cents a share on net revenue of $40.3 million.

Piper Jaffray analyst Michael Lavery said the company is well positioned to become a winner in the sector in the long term, highlighting relationships in medical cannabis, to Novartis, in the U.S. to Privateer Holdings and in beverages to AB InBev.

“We expect Tilray to remain in investment mode to drive growth and do not expect positive earnings in near-term,” Lavery wrote in a note to clients. He added that visibility on key strategic growth initiatives justifies the stock’s lofty valuation.

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Cowen analyst Vivien Azer said top line progression “keeps us constructive” on the stock. Both analysts rate the stock as the equivalent of buy.

Charlotte’s Web shares

CWEB, -10.56%

CWBHF, -10.99%

 slid 10%, after the Boulder, Co.-based CBD company posted weaker-than-expected revenue for its second quarter. The company said it had revenue of $25 million, below the $27.4 million consensus.

Piper Jaffray’s Lavery said EPS of 2 cents lagged behind his 4 cents estimate. “Management maintained 2019 guidance for $120-170M in net revenues, and it expects increases in adjusted Ebitda margins,” he wrote in a note, reiterating his overweight rating on the stock.

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Aleafia shares

ALEAF, -5.22%

ALEF, -2.50%

 fell 1.4%, after the company reported second-quarter earnings showing a net loss of C$11.5 million, or 4 cents a share, after a loss of C$1.5 million, or 1 cent a share, in the year-earlier period. Revenue net of excise taxes came to C$3.8 million, up from C$1.1 million a year ago. There are not enough FactSet estimates to form a reliable consensus.

Zenabis Global shares

ZENA, +7.69%

ZBISF, -2.68%

 after the Vancouver-based company reported a net loss of C$18.5 million, wider than the loss of C$2.9 million posted in the year-earlier period. Revenue net of excise taxes came to C$26.5 million, up from $962 a year ago. Zenabis also has two few estimates on FactSet to form a consensus.

From Marijuana Business Daily comes the news that wholesale cannabis prices in Colorado, Oregon and Washington state are on the rise. The news site cited an analysis by Seaport Global that found prices in the three states that were first to legalize adult-use cannabis have been rising since mid-April, gaining 100% in Oregon, 46% in Washington and 17% in Colorado. The move has come amid strong demand and weaker supply as more growers go out of business, farmer pivot to hemp and cultivators hold on to inventory for longer hoping for a better market.

Elsewhere in the sector, Canopy Growth

CGC, -6.99%

WEED, -6.40%,

 the biggest cannabis company by market value, was down 6% ahead of it latest earnings due after the bell Wednesday. Aurora Cannabis was down 4.8%, Cronos was down 4% and Aprhia was off 4.6%.

OrganiGram Holdings’s stock

OGI, -3.41%

was down 1.1%. and Hexo

HEXO, -5.39%

 was down 1%.

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CTST, -4.71%

TRST, -4.39%

 fell another 2.8%.

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