Cannabis company SNDL (SNDL -6.84%) is a growth-oriented business that many investors are hoping can generate great returns in the long run. The company's acquisition efforts and diversification into other businesses have made SNDL bigger and opened up more opportunities.

But before you decide to invest in the company, there are four key charts that you should look at that will help summarize the state of the business today and the risks that come with investing in SNDL.

The company's growth rate has been largely due to acquisitions

Prior to its most recent quarter (ended June 30), when SNDL reported revenue of 223.7 million Canadian dollars -- translating into a year-over-year growth rate of 2,344% -- due to the inclusion of recently acquired liquor retailer Alcanna, the company's growth rate hasn't been all that impressive:

SNDL Revenue (QoQ Growth) Chart

SNDL Revenue (QoQ Growth) data by YCharts

The growth rate that the cannabis company hit at the end of last year was also due to an acquisition -- SNDL acquired cannabis retail Spiritleaf last year and the transaction closed in July. Without that acquisition, the relatively modest 2% quarter-over-quarter growth rate the company averaged during the past few years would have been even lower.

If acquisitions are fueling the company's growth rate, that is something investors need to take into account because aggressively going after more deals could lead to frequent stock offerings. And SNDL has been no stranger to dilution.

SNDL's share count has skyrocketed in recent years

SNDL doesn't generate positive free cash flow and so it needs to rely on stock offerings to help fund its business and to pursue the growth strategy it has been deploying. Investors should find the following chart particularly worrisome as it illustrates just how dilutive SNDL has been in recent years:

SNDL Shares Outstanding Chart

SNDL Shares Outstanding data by YCharts

The sharp increase in 2021 happened as a result of the meme hype when SNDL's stock jumped in value. In addition to a lack of free cash flow, the concern I'd have as an investor is that if SNDL's stock takes off and rallies, management may take the opportunity to raise cash at a higher price, which could negate any positive momentum for the stock.

Stock offerings may be inevitable due to the company's rate of cash burn

Even if SNDL isn't pursuing costly acquisitions, dilution may be inevitable simply because of the cash the company is burning through. What's concerning is that even with the strong growth it achieved last quarter, SNDL still burned through cash from its day-to-day operating activities.

SNDL Cash from Operations (Quarterly) Chart

SNDL Cash from Operations (Quarterly) data by YCharts

The company reported CA$334.9 million in unrestricted cash as of Aug. 11 but if it continues to pursue acquisitions and it doesn't improve its cash flow, future stock offerings may be necessary for SNDL. And cash flow likely won't improve if its margins don't.

SNDL's gross margin is a big concern

Retail is a tough place to be in right now amid rising inflation, and that could put more pressure on SNDL's already tight margins:

SNDL Gross Profit Margin (Quarterly) Chart

SNDL Gross Profit Margin (Quarterly) data by YCharts

Inflation combined with an oversupply of cannabis in the marketplace could make SNDL's gross margin even worse in the near future. That doesn't bode well for the company's cash flow or its bottom line -- SNDL's net losses have totaled CA$155 million over the trailing 12 months.

Should you invest in SNDL?

The charts above should show you that investing in SNDL involves significant risk. While it may be tempting to buy the stock in the hopes that the U.S. legalizes marijuana and that sends the stock soaring, there are better stocks to buy if you're bullish on legalization. The company's oversize appetite for expansion and underwhelming financials make this too risky a stock for most investors.