Cannabis producer SNDL (SNDL -2.50%) released its fourth-quarter earnings report this week. It was another record-setting performance for the company as the top line reached a new high. And there were many other positives for investors to take away from the quarter. Has this beaten-down marijuana stock that's down 72% in the past 12 months become a good buy?

SNDL's cash flow is improving

A key metric cannabis investors should always focus on is cash flow. That's because while many companies may state that they are profitable, it's usually on an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) basis and not true accounting profitability. SNDL, for instance, reported an adjusted EBITDA loss of 7.5 million Canadian dollars ($5.5 million) for the period ending Dec. 31, 2022. Its real accounting net loss, however, was CA$161.6 million ($119.4 million), and included non-cash impairment charges and other items adjusted EBITDA excludes.

Cash flow can be a more useful indicator of how a business is doing, and that can also tell investors whether the risk of dilution and future share offerings is high. The good news for SNDL investors is that was a big positive in the past quarter, with SNDL's operating cash flow being a record high CA$28.6 million ($21.1 million) -- more than three times the CA$8.6 million it generated just a quarter earlier. The company also reported unrestricted cash and investments totaling CA$918 million ($678 million) as of the end of the year.

The top line has been growing

A big challenge for cannabis producers is that they often struggle to generate any meaningful growth these days, as too much competition and worries about a recession have created significant headwinds for companies. But in Q4, SNDL's net revenue of CA$240.4 million ($177.6 million) was up 4% from Q3, with the company reporting sequential growth in all of its major segments, including liquor retail and cannabis.

SNDL has, however, benefited from acquisitions, including cannabis extraction company Valens. It closed on that transaction in mid-January.

Could SNDL own multiple multi-state operators this year?

In its earnings release, SNDL dropped a big bombshell, hinting that through SunStream Bancorp, a joint venture it launched a few years ago to pursue investments in the cannabis industry, it could end up owning a majority stake in not one but multiple multi-state operators (MSOs) as early as this year. "The company expects that, on a structured and regulatory compliant basis, it may become a majority owner of one or more multi-state operators in the US in 2023."

SNDL has been no stranger to going after acquisitions, but targeting MSOs might be its biggest move yet. MSOs would give the Canadian-based company exposure to a much more lucrative U.S. cannabis market. The key detail for investors is what the structure may end up looking like as rival Canopy Growth has been trying to maneuver and find a way to consolidate its investments in U.S. cannabis companies without running afoul with the Nasdaq, which both Canopy Growth and SNDL trade on. 

Nonetheless, this is easily the most intriguing aspect of SNDL's growth strategy, as it could mark a big change in course for the business.

Is SNDL a buy?

I was surprised at the number of positives to take away from SNDL's recent earnings report. Sales were growing on a quarter-over-quarter basis, and even cash flow looked strong. Potentially having exposure to the U.S. market is an exciting prospect for investors. But that will depend on which MSO(s) SNDL is looking at and how everything will be structured and funded.

Ultimately, there's still not a compelling reason to buy the stock right now. The company has a lot of potential, but given the conditions in the industry still being shaky and SNDL on the cusp of more investments and acquisitions, investors may be better off waiting to see what the company does and how it performs in future quarters before investing in the business.