Forget Tilray: This Cash‑Flow Monster Can Outlast Every Cannabis Hype Cycle

Tilray Brands (NASDAQ: TLRY) is one of a handful of public marijuana companies. To be fair, the company's approach has shifted materially in the past few years, as it looks to become a brand manager. But if you want to invest in a high-risk sin stock that knows how to manage brands, you'll probably be better off with this cash-flow monster instead. Here's why.

The problem with Tilray Brands

Tilray Brands started out as a marijuana company. There's no question that this has been a high-risk investment area, as early enthusiasm for the drug hasn't been supported by the financial results of marijuana companies. Tilray Brands, for example, has yet to turn a sustainable profit.

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To management's credit, it recognized that its marijuana focus wasn't working, and it refined its business model. To that end, it has gone on an acquisition spree, buying up brands in the marijuana, CBD, and alcohol spaces. In this way, it is starting to look like a consumer staples company.

There's just one problem. The acquisitions that the company has been making have been funded with stock, diluting existing shareholders. The share count has exploded by more than 300% over the past five years, and the company still hasn't managed to turn a sustainable profit. In fact, it has already taken impairment charges across every segment of its business. That suggests that its new growth plan may not be working out as well as hoped.

Altria has a better risk/reward balance

Basically, Tilray Brands is a high-risk bet that the company manages to find a business model that sticks. In contrast, Altria (NYSE: MO) has a leading position in the U.S. tobacco market. Specifically, its Marlboro brand is the industry leader, with a 40.5% market share in 2025. Overall, the company has a cigarette market share of 45.2%.

Cigarettes account for the majority of Altria's business, which is a significant risk. The company's cigarette volumes have been in decline for years. However, the company is sustainably profitable, and price increases and stock buybacks have allowed Altria to support a growing dividend. The dividend yield is a lofty 6.1%.

The real attraction here is that the tobacco business generated lots of cash. That cash is being used to reward investors, but it is also being invested in products that management hopes will eventually replace cigarettes. Like Tilray, Altria is seeking new growth platforms, but it is doing so from a much stronger business position.

To be fair, Altria has made some missteps. For example, an investment in vape maker Juul didn't pan out. The company even got in early in the marijuana sector, but that investment flamed out, too. There have been billions in write-offs taken. But Altria was strong enough to withstand those blows and keep trying, most recently buying vape maker NJOY.

Take educated risks

Altria is a high-risk investment, given that its core business is in decline. However, that business remains a cash cow. The money Altria generates is being used to support a lofty yield and the company's efforts to find a new product. In fact, it wouldn't be a surprise to see Altria try its hand in the marijuana sector again at some point in the future.

Risk-averse investors should probably steer clear of Altria. But if you are going to take on a high-risk investment, Altria looks like it offers a better risk/reward profile than Tilray. Just make sure you keep very close tabs on the business, so you know what management is doing to offset the ongoing declines in the cash cow cigarette operation. That warning may sound worrying, but you'd have to pay equal attention to Tilray, while also worrying about the marijuana company's ongoing losses.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.