Shares of SNDL (SNDL -4.31%) have been soaring of late. The pot stock is up more than 25% since the start of October, outperforming the S&P 500 during that time, with the index up just 10%.

The cannabis and liquor company also released an impressive earnings report earlier this week. With more growth and bullishness currently behind the stock, is now the time for investors to load up on SNDL?

SNDL remains in acquisition mode

Earlier this month, SNDL announced it acquired Zenabis, a struggling cannabis company that filed for creditor protection. That's not the type of business that investors would get excited about, but it has helped SNDL acquire a facility that has European Union (EU) GMP (or, Good Manufacturing Process) certification that can export products over to the EU. Due to Zenabis' financial distress, it's also probable that SNDL got a decent deal on the transaction.

In August, SNDL also announced that it plans to acquire cannabis extraction company Valens in an all-stock deal worth 138 million Canadian dollars. Through the acquisition, SNDL estimates that it will be a "top 10 player" in the Canadian pot market overall, as well as for the cannabis 2.0 segment. (This includes products such as vapes and edibles.)

It would be surprising if SNDL is done with deals, as the company has a strong appetite for mergers and acquisitions. It acquired cannabis retail network Inner Spirit Holdings last year and closed on its purchase of alcohol retailer Alcanna back in March.

While acquisitions can be a good way to generate sales growth, they can also lead to a significant increase in expenses, including administrative and management costs. Investors need to be aware of the risks with such a strategy before buying shares of SNDL.

The company's sales and cash flow hit new records in Q3

In its most recent earnings report (period ending Sept. 30), SNDL posted stellar results, which was encouraging for investors. The company's sales totaled CA$230.5 million (largely due to alcohol retail revenue of CA$152.5 million), which increased by 3% from the previous period.

It also got back to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability, with adjusted profits up to CA$18.3 million (versus the CA$25.9 million loss SNDL reported in the previous period). What was perhaps most surprising is that the company also reported positive operating cash flow of CA$8.6 million, compared to a negative operating cash flow of CA$17.9 million in the second quarter.

Overall, it was an impressive period for SNDL. The key will be how consistently the company can generate growth without worsening cash flow or profitability. Anytime there are so many changes involving a business (e.g. acquisitions), it can create uncertainty.

The benefit, however, is that by adding Alcanna, SNDL now has a strong business to build around that can help its financials. Besides the investment segment, liquor retail was the only segment of SNDL's that reported a pre-tax profit in Q3.

Should you buy shares of SNDL?

SNDL's recent results are encouraging, but there's still too much risk within the company to make it a buy. The liquor retail business (Alcanna) looks promising and is driving much of SNDL's strong performance. But its investments segment has proven to be volatile (in the previous period its adjusted EBITDA was a negative CA$35.5 million), and SNDL diving deeper into cannabis could do more harm than good. Many cannabis businesses are unprofitable and could be vulnerable if there's a downturn in the economy.

The wait-and-see approach remains the best one to take with SNDL, as it's still too early to tell whether this is the start of a positive trend for the company or if there's more volatility to come.