It's both good and bad news for the company's investors.

The U.S. pot market is the golden goose for the marijuana industry. According to analysts from cannabis research firm BDSA, it will be worth $34.5 billion by 2025. That's nearly six times the Canadian market, which will only be at a value of $6.1 billion by then. And internationally, cannabis sales may not be much higher at $6.5 billion.

With the U.S. pot market off-limits to Canadian marijuana company Tilray (NASDAQ:TLRY), the business has been forced to look to other markets to grow its operations. And one surprising consequence of that is the business now has more market share in a European country than it does in its home base.

Tilray's market share in Germany is 20%

On Tilray's most recent earnings call, the company said it was a market leader in Germany with a market share of around 20%. A big reason for this is that the company says it has a state-of-the-art cultivation facility in the country. Plus, with its German subsidiary CC Pharma having "preferred access" to 13,000 pharmacies, that has positioned it for some excellent opportunities in the country. According to Tilray, it is the only company that is providing the German government with medical marijuana that is made within the country.

Germany is one of the top European markets for cannabis right now. While it only allows for medical marijuana, a new coalition government is looking to legalize pot for recreational use. With more than 83 million people (more than double the size of Canada), it's easy to see why Germany could be a potentially hot market for cannabis producers to enter, especially if the U.S. remains unavailable.

Market share in Canada is slipping

The German marijuana market is still in its early stages but Canada's industry is much further along, and more competitive. Recreational marijuana use was legalized in 2018, and there are now more than 800 companies that are licensed cultivators, processors, and sellers in the country fighting for market share.

All that competition is making it difficult for a company like Tilray to grow its market share in the country. The company noted that for the period ending Nov. 30, 2021, its market share in Canada dropped to 12.8% (previously it was 16%). Blair MacNeil, who is the president of Tilray's Canadian business, said in January that the company is facing an "intensive price-competitive market" but that it won't get too deep into price cutting as it "will not severely compromise margins."

But Tilray may need to do something as it is nowhere near its goal of hitting 30% market share in Canada. It suggests to me that more acquisitions could be a key part of the company's strategy to help reach that goal.

Is Tilray a Buy?

Tilray will likely lose some market share in Germany as more cannabis countries expand into Europe. Multi-state operator Curaleaf Holdings, which is a leading U.S. pot stock, set up Curaleaf International last year in an effort to penetrate the European market and is an example of a possible rival Tilray may need to worry about in the future. So while Tilray is dominating the market today, investors shouldn't get too comfortable.

And in Canada, unless Tilray slashes its prices, which, in turn, could devastate its bottom line (it posted a surprise profit last quarter), acquisitions may be the best option to grow its market share. That move, however, could lead to dilution for existing shareholders.

There's no easy answer for the company and that's what undoubtedly makes Tilray a bit of a risky buy right now. But with the company generating more than $150 million in sales in each of the past two quarters, it's a leading marijuana business in Canada that's still arguably the best pot stock in the country. Its long-term growth plans coupled with the stock trading at 52-week lows could make this an attractive buy on the dip -- as long as you're willing to hang on for what could be some challenging months (and maybe years) ahead for the business.