There’s no denying it. Tilray (NASDAQ:TLRY) has made some lucky investors much, much richer than they were just a few weeks ago. Tilray stock is now up more than 500% from its July 19 IPO price, and up more than 350% for traders who bought it on the open market immediately following its initial public offering. That’s huge. It’s also insane.

I’ve heard all the justifications:

“You buy a stock for where it’s going”

“This is a trade that could take flight if the United States legalizes marijuana on a federal level, and Canada already has!”

“Tilray stock simply has too much momentum to ignore.”

I’ve also been involved in, as a profession, the equity markets for a couple of decades now, and have witnessed more manias than I can count. Most of them end painfully, and this one isn’t apt to turn out any differently.

A Dose of Reality

Just for the sake of disclosure, just a few days ago pointed I out nine different marijuana stocks that might be a way to plug into the pot craze. Tilray stock was one of them, along with Canopy Growth (NYSE:CGC) and Cannabis Sativa (OTCMKTS:CBDS). My long-term concern for Tilray doesn’t conflict that short-term-minded list. This is something else entirely.

So what is it? I hate to use the ‘F’ word here, but I have to: fundamentals. Tilray doesn’t have much to offer in that regard. Though recreational weed will be legal in Canada next month and the United States is increasingly open-minded about marijuana, there are no scenarios is my mind that can even come close to justifying the kind of prices Tilray stock has been fetching.

Many of you may be thinking the fundamentals don’t matter for a story stock like Tilray. I wholeheartedly agree, up to a certain point. I also know, however, that the music always stops playing sooner or later. When it does, at least some of the recent buyers (and this is true for all marijuana stocks) are going to be left without a seat.

See, fundamentals don’t matter right up until the point that they do. And then once they become important, they somehow become monumentally important.

Seen It Before

It’s not like we have seen this very story play out before, albeit with different characters. Remember how the advent of 3D printers was going to revolutionize manufacturing, allowing anyone with a garage to get into the business. Clearly 3D printers aren’t a must-have.

Remember how hot solar panel stocks were in 2007, as solar power was going to end the era of fossil fuels? Never happened. The dot-com boom and bust. Cryptocurrencies. B2B. Heck, even marijuana stocks were red hot in 2012 and 2014, when legalization matters were on the ballots in several states. Most of those names failed to remain red hot though.

If you think it’s different this time you’re a victim of what psychologists call confirmation-bias.

Fundamental Matter

Even without the psychological factors in play though, there is an overarching fundamental argument against investing in the company. Even if exactly 100% of next year’s projected revenue of $153 million is turned into net profits, Tilray is still sporting a market cap of nearly $10 billion. That would translate into a still-crazy forward-looking P/E ratio of 65.

And the company isn’t going to convert all of its revenue into earnings. It’s not even going to get close. Tilray has lost nearly $18 million over the course of the past six months alone, and the bigger the company gets, the more it has to spend. Never even mind the fact that should marijuana be legalized in more states, the more deeper-pocketed players become interested.

Bottom Line for Tilray Stock

It’s been a fun ride to be sure. And, TLRY stock may well continue to travel higher for the foreseeable future, riding the hype wave. The fact that legalization is back on the ballot in several states again for November’s voting — one way or another — is providing some sort of tailwind.

That’s not a wave built to last in perpetuity though. You may not like that reality, but that doesn’t make it untrue.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.