Tilray Inc. (TLRY.O) sold less than US$10 million worth of cannabis in the second quarter. Its market value is approaching US$5 billion.

The Nanaimo, B.C.-based company, which listed on the Nasdaq in July, is not alone in attracting valuations multiples ahead of revenue. But with a 40 per cent jump in its stock price over two trading days before a pullback on Tuesday, it’s a stark example.

Tilray reported a net loss of US$12.8 million on sales of US$9.7 million for the three months ended June 30. The company sells medical cannabis to patients in 11 countries and is ramping up to supply recreational pot to the Canadian market when the drug is legalized on Oct. 17.

Its market capitalization of US$4.8 billion makes it the third largest cannabis company after Canopy Growth Corp. (WEED.TO) and Aurora Cannabis Inc (ACB.TO).

Canopy has a market value of $12.4 billion and reported revenue of about $26 million in the quarter ended June 30.

It’s not unusual for companies in burgeoning industries to generate sky-high valuations despite little to no profit. Tesla Inc. loses hundreds of millions of dollars every quarter and boasts a market value of about US$54.5 billion and it took Amazon.com Inc. years to begin generating consistent profits.

Tilray’s revenue is expected to grow significantly over the next three years. Analysts see full-year sales growing to US$499 million in 2021 from an estimated US$44 million this year. And valuation is being supported by more than just results. Canopy’s US$3.8 billion deal with Corona beer maker Constellation Brands Inc. is expected to be the first of several tie-ups between the cannabis and alcohol industries, and Tilray is a tempting target, according to Cowen & Co. analyst Vivien Azer.

“We expect more alcoholic beverage companies to announce deals with Canadian LPs over the course of the year, and view Tilray as an attractive partner for an alcohol company looking for exposure to cannabis” given its brand portfolio, focus on clinical trials and access to consumer data, Azer wrote in a note published Monday.