With the market's warm reception to Tilray Brands' (TLRY 2.52%) latest earnings report, the marijuana conglomerate's outlook is looking better and better. After weathering the brutal doldrums of the marijuana market over the past year and a half, business is finally starting to pick up. 

And over the next couple of years, this company might finally start to blossom into the multinational marijuana powerhouse that investors have been hoping for. So let's take a minute to learn about two new reasons it might be worth buying a few shares in August. 

1. Sales in major segments are picking up steam, with more to come

The biggest new reason to buy Tilray stock soon is that it's (finally) growing again after a difficult couple of years in the marijuana industry. In the fiscal fourth quarter ended May 31, Tilray brought in sales of $184 million, up 20% from the same period last year. Importantly, while its cannabis segment looks like it's starting to recover from the prolonged slump of 2022, alcohol sales grew the fastest, increasing by 43% to reach roughly $32 million. That suggests its subsidiaries, Montauk Brewing Company, Breckenridge Distillery, and SweetWater Brewing, are finding traction in their North American markets. 

Plus, with Chief Executive Officer Irwin Simon saying on July 26 that the company is scouting for acquisition opportunities in the alcohol industry with the goal of expanding to reach annual alcohol sales of $300 million over the coming years, there is reason to believe that growth will continue at a snappy pace for a while. However, investors should note that the North American alcohol market is awash with powerful competitors, many of which have much more valuable brands, more customer loyalty, and vastly larger operations than Tilray. In other words, at some point it will need to outcompete other players to continue to penetrate the market, and that won't be easy. So expect marketing spending to rise steadily. 

2. Free cash flow is likely on the way

On an adjusted basis, Tilray reported free cash flow (FCF) of $43 million in fiscal Q4, marking a change from a year ago when it had a loss of $24 million. While it will take a while longer for the company as a whole to report positive FCF on a full-year and non-adjusted basis, management is confident that the 2024 fiscal year will be cash-flow positive with the help of a few accounting concessions. And that's a big reason to buy the stock because it will be the first time in its history that it can say that, assuming it happens.

Generating FCF will also open several doors that it could take to accelerate shareholder returns. First, Tilray could rebuild its cash reserves, which are currently around $206 million. That would give it more flexibility to acquire promising marijuana or alcohol companies, both of which it has demonstrated a taste for buying. 

Second, it could consider initiating a dividend or doing share repurchases to return capital to investors. Typically, a consumer packaged goods (CPG) business like Tilray would reinvest its earnings into growth for a long time, and only start to return capital once it settled into a long-term profitable position in its markets. But, considering that its margins appear to be improving quickly year over year, and that its market share for cannabis in Canada is on track for recovery, that time may come within the next few years. And finally, it could also repay some of its nearly $137 million in long-term debt to free up some leverage for when it might need it down the line. 

Why now?

Given that Tilray remains a risky stock, it's reasonable to ask why August is a good time to start a position. In short, the stock market is forward-looking. By the time investors have a few years of strong financial performance to consider, the upside from an investment might be largely tapped out, as popular expectations will be for its performance to continue.

Buying sooner rather than later entails larger risks, as there's a chance that its Q4 performance is an outlier which won't be repeated. But it's also the way that investors will gain the potential of the biggest returns, as the uncertainty about Tilray's future growth potential remains high. Just be sure to stay on the sidelines if you're risk-averse; this growth stock still has a lot to prove about its ability to become profitable with its vertically integrated business model.