Tilray's smoking-hot stock: A case of reefer madness?

It's another day of thrills and chills for investors in Tilray, the medical marijuana company whose skyrocketing -- but volatile -- stock price reflects the emerging cannabis industry's vast, yet uncertain, commercial prospects.

Tilray shares rose as trade opened, only to slide more than 20 percent by midday, lopping roughly $4 billion off its market value in a matter of hours. The company's stock has soared more than 660 percent since going public on Nasdaq in July. That rise has some comparing Wall Street's fascination with cannabis to last year's surge in bitcoin and other cryptocurrencies.  

The swing was fueled partly by news that a private equity fund backed by PayPal co-founder Peter Thiel holds 76 percent of its equity. But other investors expressed skepticism about the run-up in the company's shares. Citron Research, known for its success in betting that the value of given stocks would fall, disclosed over Twitter that it held a short position in the shares.

"The move in Tilray is beyond comprehension. No one needs a market pundit to explain that," the investment firm said in its tweet. 

Sales at Tilray, which began operations only four years ago, are growing but it's yet to turn a profit. Through March 2018, the company has lost more than $45 million, according to a regulatory filing. The company operates in countries where cannabis is legal, such as Canada and Germany, and sells through brands such as Goodship, an edibles company that makes CBD-infused cookies. 

Yet some investors are clearly banking on the growing market for medical and recreational marijuana, as well as many other cannabis-based products. Coca-Cola, for instance, is reportedly interested in beverages infused with CBD, the ingredient in marijuana that treats pain but doesn't get people high. 

As Tilray CEO Brendan Kennedy told CBSN in 2016, "Our focus is on building mainstream, global brands that help transition the cannabis industry from an illicit market to a fully legal, transparent market around the world."

The volatility in Tilray's stock isn't unlike other companies in new industries with the potential to disrupt established businesses, said Stuart Titus, chief executive of Medical Marijuana Inc., a publicly traded company that develops marijuana-related products like CBD treatments.

"Like any emerging industry, you will have ups and downs and a tremendous amount of volatility," Titus said. "The cannabis market has the opportunity to disrupt a lot of other markets," such as the alcohol and pharmaceutical industries. 

That was the message Kennedy conveyed Tuesday on CNBC's "Mad Money" television program, where he said that cannabis products are an alternative to opioids and other pharmaceutical products. 

"I think all the alcohol companies need to enter this industry. It's a great hedge for them," he said on the program. "Whether you're an alcohol company or an investor in an alcohol company, this is a global opportunity."

Still, what some see as great promise, others might view as a speculation-fueled bubble. About $6.5 billion worth of Tilray stock traded on Wednesday, only trailing Amazon's $7.6 billion, according to Bloomberg. Tilray, though, is worth a fraction of Amazon's nearly $1 trillion valuation.