From one perspective, Tilray (NASDAQ:TLRY) looks like a massive disappointment. Most marijuana stocks have performed nicely this year, but  Tilray stock hasn’t followed that trend. TLRY stock price is down 34% so far this year. And it’s lost a full 85% from its 52-week high.

In the context of the industry, that performance seems awful. Canopy Growth (NYSE:CGC) has gained 77% so far this year and trades just 20% off its highs. Aurora Cannabis (NYSE:ACB), too, has risen over 70% in 2019. Cronos Group (NASDAQ:CRON) has pulled back lately,  but investors in its shares still are up 49% so far this year.

It certainly looks as if investors have decided that Tilray isn’t a “real” competitor in the cannabis space. And with Constellation Brands (NYSE:STZ,STZ.B) and Altria (NYSE:MO) putting billions into Canopy and Cronos, respectively, there is a clear long-term risk that Tilray stock will get left behind.

That said, the returns of TLRY stock are skewed by the incredible bubble that formed in the stock last year. In just 30 days last year starting on Aug. 20, Tilray stock went from $36 to $214. In the last week of that stretch, TLRY doubled. The gains were ridiculous and obviously unsustainable. But aside from that huge move, Tilray stock has done reasonably well; it’s actually risen more than 100% since July 1.

And it’s possible that TLRY could do well again. I’m still a bit skeptical about marijuana stocks in general, and Tilary stock still isn’t cheap. But Tilray’s intriguing strategy means Tilray stock might not be as far behind as the stock charts seem to imply.

Why TLRY Stock Price Has Lagged Other Marijuana Stocks

At this point, marijuana stocks still are  priced based on feelings. There isn’t enough data on marijuana companies so far to support realistic valuation methods. Any models of future earnings have the “garbage in, garbage out” problem. If an investor expects a specific company or the pot industry as a whole to succeed,  its out-year numbers will look better. The numbers aren’t proving anything; rather, they reflect the bias of the modelers.

In that context, it’s not hard to see why investors might sell Tilray stock. Thanks in part to the August-September bubble, the chart of Tilray stock has deteriorated a great deal. In the meantime, as InvestorPlace columnist Tom Taulli pointed out, Tilray, unlike Cronos and Canopy, hasn’t struck a big deal to bring in cash and/or  a partner with consumer expertise.

The selling of Tilray stock by insiders last month didn’t help, particularly given that the majority of Tilray stock is owned by Privateer Holdings. (That stake has caused the number of shares of TLRY stock to be quite limited and is part of the reason TLRY stock price went so crazy last year.) Privateer has promised not to sell shares in the first half of this year,but some investors and traders may still be anticipating potential sales later in 2019 or beyond.

And Tilray’s production seems behind that of its  peers,  partly because its management doesn’t believe the opportunity in Canada is as lucrative as many think.

So it seems tough to make the bull case for TLRY stock. Canopy is the leader at the moment, and as I’ve written previously, seems like the simplest play on pot. Aurora Cannabis has an intriguing, diversified, strategy. Cronos has the backing of Altria. Why, then, would investors own Tilray, which has lower production, less optimism toward existing markets, and a potential flood of shares heading to the market in a matter of months?

Why Tilray Stock Could Rally

The one reason  why TLRY stock would be a good pick is that it’s zigging while its rivals are zagging. As Eight Capital detailed in a report last week, Tilray’s lower production isn’t necessarily a bad thing  or a sign that TLRY is not executing. Rather, its management simply sees the Canadian marijuana market heading toward a period of oversupply  and doesn’t want to throw good money after bad.

On that front, Tilray isn’t necessarily wrong. In fact, skeptics who see a bubble in marijuana stocks usually point out that the product is going to become commoditized, crushing companies’ profit margins. And legal U.S. markets have seen that phenomenon play out already: In Oregon, for instance, six years’ worth of supply have already been produced. Unsurprisingly, prices there have fallen by more than half.

If a similar scenario plays out in Canada, then companies building out expensive production capabilities won’t receive a return on their investment. At least some of the billions of dollars they raised will essentially have been wasted. Plunging prices will disappoint investors who are expecting big long-term profits, and marijuana stocks will, for the most part, plunge.

But in that scenario, Tilray would win. TLRY is focusing on creating branded products .  Its differentiation should reduce its capital needs, raising its margins. TLRY is betting that it will be able to buy marijuana (and hemp) cheap and sell processed versions for a much higher price. It’s an intriguing idea  that will pay off if the predicted plunge in wholesale prices arrives.

The Catches

There are two immediate problems, however, even if Tilray is right. The first is that such a bull case doesn’t necessarily require – or even indicate – that investors should buy Tilray stock right now. The overhang of shares  is still weighing on TLRY stock price, and likely will do so for some time. And it will take time for Tilray’s thesis to be validated.

Perhaps more importantly, if Tilray is right, other marijuana stocks are going to fall sharply. And that pressure will probably  negatively impact  TLRY stock price, at least to some extent. It’s a narrow bull case to argue that, essentially, all pot stocks except for Tilray stock are going to struggle.

But there are reasons to at least keep an eye on Tilray stock. Even investors who own other marijuana stocks should  listen to the apparently contrarian arguments coming from its management.

After looking at the chart of TLRY stock, It’s easy to dismiss its management.  But it’s not Tilray’s fault that TLRY stock price went haywire. Meanwhile, the recent declines of Tilray stock look like they were caused by the company going against the grain. But being contrarian can create long-term rewards as easily for companies as it can for investors.

As of this writing, Vince Martin has no positions in any securities mentioned.