The competition among marijuana stocks has been fierce in recent months, as the big rebound in share prices across the cannabis industry has reflected growing optimism about the fundamental prospects for the business as a whole. Tilray (NASDAQ:TLRY) has a market capitalization that puts it in the upper echelon of marijuana stocks right now, and although its stock is down sharply from its best levels last fall, the cannabis company has still set expectations high among its investor base to produce immense growth and take advantage of favorable trends across the marijuana market.

Coming into Monday's fourth-quarter financial report, Tilray investors wanted to see signs that it could compete effectively against its fellow cannabis giants, including Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). Tilray's numbers were impressive, but there were still some key ways in which it hasn't yet matched up to what Canopy and Aurora have accomplished in a short time.

Building with Tilray logo on the side, with empty parking lot.

Image source: Tilray.

Tilray sees explosive growth

Tilray's fourth-quarter results were reasonably in line with what we've seen from Canopy, Aurora, and other companies in the cannabis industry. Sales came in at $15.5 million, more than tripling year-earlier levels and topping the projections that many of those following the stock had made on the top line. However, net losses widened to $31 million, and that worked out to $0.33 per share, which was significantly worse than the $0.15-per-share loss that marked the consensus among investors.

Fundamentally, Tilray kept growing its production capacity, but it still lagged badly behind its peers. Sales volume almost tripled to 2,053 kilos, and although that was up from less than 700 kilos in the prior-year period, it was still significantly less than the nearly 7,000 kilos that Aurora sold and the 10,000 kilos of sales volume for Canopy.

Tilray did manage to score a victory in terms of pricing. The cannabis company reported average net selling prices of $7.52 per gram, up about 6% from $7.13 per gram a year ago. A more favorable sales mix likely played a role in the improvement, although the rise is impressive in light of the fact that many recreational cannabis products industrywide have had lower prices than comparable products in the medical marijuana arena.

Tilray invested a lot more toward trying to grow. Research and development costs jumped by 150%, and sales and marketing expenses nearly doubled from year-ago levels. At the same time, higher interest costs on outstanding debt weighed on Tilray's bottom line, and skyrocketing overhead expenses and stock-based compensation costs also added to the marijuana company's red ink.

Check out the latest earnings call transcript for Tilray.

What's Tilray's path forward?

CEO Brendan Kennedy emphasized the strategic moves the company has made. "Our team made significant progress on our long-term initiatives," Kennedy said, "including increasing production capacity, expanding and strengthening strategic partnerships, and acquiring complementary businesses to accelerate our future growth and leadership position in medical and adult-use cannabis." The CEO believes that global growth opportunities will play a key role going forward.

Yet despite highlighting its partnerships with Novartis' (NYSE:NVS) Sandoz division, Anheuser-Busch InBev (NYSE:BUD), and privately held Authentic Brands Group, Tilray still finds itself acting largely on its own. The A-B InBev deal involves a modest $100 million joint venture, which is small compared to the massive investments that Canopy Growth attracted from Constellation Brands. The Sandoz collaboration arguably has a greater potential long-term impact, but it's unclear to what extent global growth will come more from medical marijuana rather than recreational cannabis products.

Without a high-profile investment from a consumer-goods partner, Tilray's acquisitions will play a more essential role in its future success. The Manitoba Harvest purchase has particularly important implications, as it not only expands Tilray's addressable product lines to include edibles but also potentially opens the door to valuable distribution channels into the U.S. market.

Tilray investors seemed largely unmoved by the news, and the stock settled to trade near the unchanged mark on Tuesday morning following Monday afternoon's report. Tilray is still maintaining a premium valuation, but in order to justify it, the company needs to ramp up and compete more favorably against Aurora, Canopy, and other up-and-coming players in the cannabis space.