Tilray Brands Inc. (TLRY) shares plummeted 5.24% in after-hours trading on Thursday, despite the cannabis company reporting better-than-expected fiscal first-quarter results earlier in the day. The stock's decline comes after a strong performance during regular trading hours, where it had surged over 20%.

In its Q1 earnings report, Tilray posted a surprise profit and beat revenue expectations. The company reported net revenue of $209.5 million, up 5% year-over-year and surpassing analyst estimates of $204.55 million. Tilray also delivered a net income of $1.5 million, or $0.00 per share, compared to a net loss in the same quarter last year. Adjusted EBITDA increased 9% to $10.2 million.

However, the after-hours sell-off appears to be driven by Tilray's filing of a mixed shelf offering with the SEC following the market close. This move allows the company to issue various types of securities, including common stock, preferred stock, debt securities, warrants, and units, up to an unspecified amount. While such filings are common for companies looking to raise capital, they can sometimes lead to concerns about potential dilution for existing shareholders.

The sharp reversal in Tilray's stock price highlights the volatile nature of cannabis stocks and investor sensitivity to potential dilution. Despite the positive earnings report, the prospect of additional share issuances seems to have overshadowed the company's improved financial performance in the eyes of after-hours traders.