Although earnings season has typically come to represent a period of a few weeks every quarter where a majority of brand-name companies release their operating results, earnings season never truly stops. And this week, it's all about cannabis companies, with pretty much every brand-name pot stock set to unveil their quarterly operating results. One of those big names is marijuana bottle rocket Tilray (NASDAQ:TLRY).

After the closing bell today, Tuesday, Nov. 12, Wall Street expects Tilray to deliver $49.6 million in sales, up nearly 400% from the prior-year period, with a loss per share of $0.30, which would be noticeably wider than the $0.20 per share loss in the year-ago quarter. For what it's worth, Tilray has missed Wall Street's quarterly loss estimates by a mile in four consecutive quarters, leading to wider-than-expected losses per share.

But as is the case with most marijuana stocks, there really shouldn't be too much attention paid solely to headline figures. Rather, it's the underlying story behind the headline numbers and guidance that matters a lot more. With Tilray set to dish on its latest quarter, here are the three biggest questions that the company will need to answer.

An up-close view of a flowering cannabis plant.

Image source: Getty Images.

1. What's being done to improve margins?

Let's start with the elephant in the room – Tilray's poor gross margin. In each of the past three quarters, Tilray has produced gross margins of 20%, 23%, and 27%, respectively, with the 27% occurring in Q2 2019. While improving, this is well below where investors envisioned Tilray's margins about a year ago, and pessimists have punished Tilray's stock as a result.

Perhaps the biggest issue for Tilray is that its acquisition of Manitoba Harvest is weighing on its margins. Manitoba Harvest is a hemp foods company, and while its distribution network is valuable in that it gives Tilray access to roughly 16,000 retail doors throughout North America, hemp food sales themselves are relatively low margin. Keep in mind that Tilray should be able to commence sales of cannabidiol (CBD) products via this distribution network sometime in 2020, which should yield a healthy boost to margins, but this is still a few quarters away from being recognized on the company's income statement.

Tilray has also been slow to boost production capacity, and has been active on purchasing wholesale cannabis. These wholesale purchases are absolute margin killers, so it'll be interesting to see if the company has any plans to increase domestic or international capacity to help reduce these wholesale pot purchases.

A person holding a vial of cannabinoid-rich liquid in front of a hemp plant.

Image source: Getty Images.

2. How badly will regulatory delays hurt the company's prospects in Canada?

It's also no secret that regulatory and procedural issues are creating havoc in the cannabis supply chain in Canada.

For instance, Health Canada began the year with more than 800 cultivation, processing, and sales licenses on its desk for review. This is far too many applications for the regulatory agency to handle in a timely manner, and it's resulted in plenty of growers being relegated to the sidelines.

More specific to Tilray, it's been hurt by the slow rollout of physical dispensaries in select provinces. Although I pick on Ontario often, it's a province of 14.5 million people that has one open dispensary for about every 604,000 people. That's simply not enough to give consumers an option to buy legal marijuana, which is coercing consumers to purchase from black-market producers. That's a problem for growers like Tilray.

What Wall Street and investors want to know is just how long Tilray expects these regulatory hurdles to last, as well as how badly the company might be hurt by the delayed launch of derivative products (e.g., edibles, vapes, concentrates, topicals, and infused beverages) in Canada. Derivatives should begin appearing in dispensaries by mid-December, but their uptake could be slower than expected given that they're facing the same supply problems as dried flower. You can count on Tilray's management addressing this in its quarterly report.

A large question mark being drawn on a white puzzle piece being held up by a hand.

Image source: Getty Images.

3. What's the game plan?

Lastly, investors are going to look for CEO Brendan Kennedy to put the puzzle pieces together and offer a clearer take on where Tilray is headed next.

As you might recall, Tilray announced in mid-March that it was going to de-emphasize investments in Canada in favor of markets like Europe and the United States. This was an odd move to make considering that Canada had only legalized recreational marijuana six months prior, in Oct. 2018. Then again, Europe and the U.S. offer more bountiful long-term sales potential than Canada, so this might explain management's decision to make this move.

The thing is, Tilray's game plan looks sort of like a hodgepodge of ideas rather than a unified front focused on success at the moment. It wants to offer high-margin CBD products in the U.S., but is stuck buying wholesale cannabis in its home market and getting killed on the margin front in the process. It wants to become a major medical marijuana player in Europe, but most European countries are still formulating their cannabis laws. In other words, Wall Street and investors don't really know what's next for Tilray, whereas this question can more or less be answered for many of its peers. Expect management to more concisely define what sort of near- and intermediate-term goals the company will target to create shareholder value.

Now, we simply watch and wait for the magic to happen after the closing bell.