Head coach Nick Nurse said the guard will be out "weeks" while noting the injury is "not good," per Eric Smith of Sportsnet.
Powell initially suffered the injury in Monday's game against the Utah Jazz and was forced to come out after less than a minute of playing time. According to Josh Lewenberg of TSN, tests first revealed a subluxation of his left shoulder, also known as a partial dislocation.
When healthy, Powell had been a useful part of the Raptors rotation while helping expand the team's impressive depth off the bench.
In 11 games, including two starts, the guard averaged 5.0 points and 2.0 rebounds per contest while shooting 40.9 percent from three-point range. He has also been a quality on-ball defender since being a second-round pick in the 2015 NBA draft.
This helped him earn a four-year, $42 million contract extension last offseason despite modest overall numbers.
Toronto has enough players to handle this extended absence, but it will force Delon Wright into a bigger role alongside Fred VanVleet in the second unit. Lorenzo Brown should also see more minutes at the wing.