Tilray Brands (TLRY -5.14%) is one of the largest, most recognizable cannabis companies in North America. Its valuation is north of $600 million, and that's with the stock nosediving in recent years. Since 2022, the stock has lost a staggering 90% of its value.

Investors have been clearly hesitant to invest in not just Tilray, but the cannabis industry as a whole; the AdvisorShares Pure US Cannabis ETF is down by a similar amount during the same time frame. But with Tilray Brands arguably an industry leader, could it be one of the more compelling options to consider, especially if you're willing to buy and hold for the long haul?

I will make both bullish and bearish cases for the business, to help determine whether this could truly be an underrated growth stock, or whether it's just really simply a bad investment that's destined to go lower.

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The bullish case for Tilray Brands

Tilray has expanded over the years, as it looked for ways to grow outside of cannabis. Since legalization isn't on the horizon in the U.S. anytime soon, Tilray, which is based in Canada, has been focusing on opportunities that can expand its top line, without being dependent on U.S. cannabis reform. A big way it has accomplished that is through acquiring craft beer brands.

The company is now so well diversified that its core cannabis business accounts for just 30% of its top line. Its beverage business accounts for 29%, and its distribution business (it includes the purchase and resale of pharmaceutical and wellness products) makes up 33% of revenue. Its wellness segment, which includes the sale of hemp-based foods, represents the remaining 8%.

Tilray's various segments can allow it to grow in the long run, with or without marijuana legalization in the U.S. For the fiscal year ended May 31, Tilray's top line rose by 4% to $821.3 million.

Investing in the stock, which trades well below its book value, with a price-to-book multiple of about 0.4, could potentially make it an attractive option for patient investors who are willing to sit and wait for the business to grow and increase its bottom line. For the current fiscal year, which ends May 31, 2026, Tilray is projecting its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be within a range of $62 million to $72 million, which would be a gain of between 13% and 31% from the $55 million adjusted EBITDA it posted in fiscal 2025.

The bearish case for Tilray Brands

Tilray's business has been growing, but the company has leaned heavily on acquisitions to do so. It has been acquiring craft beer brands that alcohol companies have been willing to let go in order to focus on faster-growing products. In the company's most recent quarter, revenue from its beverage business totaled $65.6 million, which was down 14% year over year. In its cannabis segment, sales fell by 6%.

Tilray has often pumped up its growth opportunities too aggressively, and that can do more harm than good for investors. Back in 2021, it laid out a plan for it to get to $4 billion in revenue by 2024, which involved promising opportunities in the U.S. and international cannabis markets. Instead, the company recently finished its most recent fiscal year, and it hasn't even hit $1 billion in annual revenue. That's with the help of acquisitions in the beverage industry.

Investors should tread carefully with chief executive officers like Tilray's Irwin Simon, who are quick to boast of a company's growth opportunities without being able to back them up with hard numbers. Anyone can make forecasts and projections that are based on best-case scenarios, but that doesn't mean the story will play out that way in reality. And when so much optimism is pumped into a business, that can set the stock up to fail, which is what has happened with Tilray in recent years, as investors have become disillusioned with its results.

While the company sees a path to improving adjusted EBITDA, its unadjusted net income remains firmly in the red. Last quarter, the company reported a net loss of nearly $1.3 billion as it incurred impairment charges totaling $1.4 billion. And with a light gross profit margin of 30%, it may not be easy for the business to get to breakeven anytime soon.

Is Tilray Brands a good stock to buy right now?

Tilray's stock has been rallying in the past month, but that doesn't make it a good buy. There are periods where the stock rallies due to speculation, but the longer and more persistent trend is one of declining value, and that's a pattern I expect will continue.

Without a compelling growth opportunity that doesn't rely on acquisitions, or at least the hope that the business will find a way to become profitable, investors are likely better off just avoiding Tilray's stock entirely; there's too much risk and volatility with this investment.