The raw numbers don’t support investing in the hype machine that has become Tilray (TLRY).

And make no mistake: the hype around the cannabis player once again flew as freely as smoke from a lit joint on the company’s third quarter earnings call Tuesday.

“What you will hear is how the results reflect the beginning of a global transformation of a $150 billion industry from the state of prohibition to the state of legalization. As we have discussed with you in the past, this continues to accelerate and become a reality,” Tilray CEO Brendan Kennedy told five stock analysts on a conference call.

Kennedy, who several months ago predicted Tilray would someday be worth $100 billion, has helped to stoke interest among retail investors day-trading the momentum stock from home. To Kennedy, Tilray is poised to capitalize on global adult use of legal weed and cannabis being among the drug of choice for medical purposes. The ability of Kennedy to pitch Tilray as the next big thing – coupled with enthusiasm on the cannabis space at large — has pushed the stock up some 500% since the company’s July IPO. Tilray now has a market cap of more than $10 billion, despite no clear sign when profits will become the quarterly norm.

At least that’s the takeaway from Tilray’s second earnings report as a public company.

Tilray sold 1,613 kilograms –- or about 3,556 pounds –- of cannabis in the third quarter, from 684 kilograms in the same period of last year.

Increased patient demand, bulk sales and wholesale distribution in Tilray’s export markets drove revenue to $10.04 million in the quarter, an 86% increase over last year. Losses, excluding some items, were 8 cents per share, narrower than consensus expectations of an adjusted 11-cent loss per share, according to Bloomberg data.

Tilray’s net loss, which includes stock-based compensation charges and higher operating costs, rose to $18.7 million, or 20 cents per share, compared with $1.8 million a year ago.

But several numbers suggest greater caution is warranted by those Tilray momentum traders:

• Tilray’s net selling price per gram fell to $6.21 from $7.53. The company blamed greater bulk sales of products to customers.

• Gross profit margins tanked to 31% from 55% a year ago also because of more bulk product sales. Execs on the call reiterated they see 50% profit margins over the long term.

• Tilray has racked up $34 million in operating losses year to date as it works to expand its operations and pays out stock-based compensation to executives.

Tilay shares dropped 6% in early trading Wednesday to around $106.

Kennedy did his best to keep investors interested in the story, rather than focusing on another net loss, by outlining several “milestones” ahead.

“We anticipate the following milestones in the next 6 months to 12 months; additional adult-use supply agreement in Canada, shipping Tilray products to pharmacy chains in Canada, exporting Tilray medical products to new countries, expanding Tilray’s medical cannabis product offerings in the international markets we currently serve, extending our existing pharmaceutical partnerships to additional countries and regions, completing the build-out of our facility in Portugal, obtaining a manufacturing license and GMP certification in Portugal, obtaining production and sales licenses for High Parks’ processing facility in London, Ontario, additional clinical trials, recruiting additional executives from outside the industry to further strengthen our management team, and finally, adding strategic partnerships,” Kennedy said.

But with another tepid quarter in the books, Tilray’s IPO lock-up period expiring on Jan. 15, 2019, $400 million in new debt on the books and Kennedy signaling on the call he is open to using stock to fund M&A (could be dilutive to shareholders), investors may be better off staying clear of this high-flier.

Emily McCormick contributed to this story.

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Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

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