Miserable news for investors in cannabis stock Tilray Brands (TLRY -0.56%) this morning: Earnings are out, and the news is not great.

Analysts forecast Tilray to lose $0.05 per share in its fiscal Q3 2024. For what it's worth, Tilray's reported loss rounded closer to $0 -- so that's the good news (albeit we're only talking about pro forma profits here). Unfortunately, analysts also hoped Tilray would report $198.5 million in sales for the quarter, so Tilray's admission that it sold only $188.3 million worth of product seems to have spooked investors.

As of 10:30 a.m. ET, Tilray shares are down 21.5%.

The bigger they are, the harder they fall

Tilray is one of the biggest marijuana stocks around -- twice the market cap of rival marijuana stock Canopy Growth, and only a couple of OTC-listed cannabis stocks are bigger. But Tilray shares are shrinking fast in the wake of today's news.

Total sales for the quarter climbed 30% year over year. That wasn't fast enough for investors, though, and most of Tilray's growth -- about 80% of it, in fact -- came from growth in the company's alcoholic beverages business (as in, not marijuana growth at all). Marijuana revenues did grow 33%, but distribution revenues declined by 13%, and profit margins on those distribution revenues shrank by one full percentage point, to 10%.

On the bottom line, Tilray reported a generally accepted accounting principles (GAAP) loss for the quarter of $0.12 per share.

Is Tilray stock a sell?

Ultimately, what really seems to be doing in Tilray today is the fact that it's still losing money -- and just retracted a promise to make money. Up till now, investors had hoped Tilray could deliver on its promise to report strong positive "adjusted EBITDA" (earnings before interest, taxes, depreciation, and amortization), which is an unreliable number, this year, but back that up with also positive free cash flow (a number harder to fudge).

That's not going to happen. "The Company no longer expects to generate positive adjusted free cash flow for the full fiscal year 2024," warns Tilray. And if Tilray can't do that, it seems investors don't want to own Tilray stock.