Tilray Brands (TLRY 1.71%) was a high-flying stock late in the last decade. As investors awaited the legalization of cannabis in Canada and a few U.S. states, investors piled into the stock, taking it to an all-time high of $300 per share in 2018.

However, the sector suffered as the market became oversupplied, and a resurgence in interest during the pandemic was followed by another reversal after the stock reached its 2021 high of $67 per share. Today, Tilray sells at more than a 99% discount from its record-high price, around $2 per share.

Nonetheless, the marijuana stock has reinvented itself, diversifying into noncannabis products. It now owns more than 20 different brands. The question for investors is whether its low price and a potential comeback could make them millionaires.

How Tilray has changed

Tilray remains a marijuana industry pioneer, leading the way in the research, cultivation, and distribution of cannabis in over 20 countries worldwide.

Still, oversupply and the slow legalization process in the U.S. and other countries have often hampered Tilray's stock growth and dashed investor expectations.

Tilray has responded by diversifying and buying beer brands from Anheuser-Busch InBev. That move has made the company the fifth-largest craft brewer in the U.S., and it now accounts for around 5% of the U.S. craft brewing market. This part of the business was 19% of Tilray's revenue in the first half of fiscal 2024, which ends in May.

Around 7% of Tilray's revenue comes from wellness brands. This includes hemp-based foods and CBD beverages. Cannabis accounted for just 37% of the company's revenue, with its distribution business (which primarily involves cannabis-based products) accounting for an additional 37%.

The path to millionaire status

Diversified consumer businesses sometimes mint millionaires. If more consumers take a growing interest in Tilray's products, small investors could move significantly toward that status.

Unfortunately, the company's financials would need to experience substantial improvements before investors could realistically see such a milestone. Tilray earned $371 million in revenue in the first two quarters of fiscal 2024, rising 25% versus the same period in the prior year. This included a 27% increase in cannabis sales and a 68% rise in its beverage alcohol business, boosted primarily by buying the Anheuser-Busch brands.

Still, the company continues to post operating losses. It lost $102 million in the first half of the year, down from a $127 million loss in the year-ago period.

Also, since Tilray holds only $143 million in cash, it will likely have to add to its debt or issue more shares in the near future to fund operations. With the stock around $2 per share, share issuance is a less appealing option.

Fortunately, Tilray's debt-to-equity ratio is just 0.14, a modest amount considering Tilray's $3.4 billion book value. And since its price-to-sales (P/S) ratio is below 2, investors can buy this stock close to a record low valuation.

Investors should not buy a stock simply because its valuation appears low, but it speaks to the level of pessimism around Tilray that this stock has been cut by 40% over the past year. This seems to imply that negative market sentiment may hold more sway over the stock price than its financial struggles.

Will Tilray stock mint millionaires?

Unfortunately, Tilray stock is unlikely to mint millionaires among small investors or return to that $300-per-share high from 2018 anytime soon. (Turning $1,000 into $1 million over 20 years would require a 40% annual return. Stretch that out to 30 years and 26% would be needed.)

Nonetheless, the stock has shown signs that it could deliver considerable returns for shareholders. The recent revenue increases for the cannabis business bode well, and if more jurisdictions legalize cannabis, that growth rate could rise further. Also, its craft beer brands offer diversification, which supplies some safety. If one sector crashes, another can stay strong.

Additionally, the stock's low P/S ratio means investors could buy at a low valuation. If the company can move closer to profitability, its growth could persuade investors to bid up the stock price, bringing outsize returns over the long term.