Right now, you can say that Sundial Growers (NASDAQ:SNDL) is low-priced, but not cheap. In other words, shares are overvalued at 70 cents per share. Despite the fact the stock has fallen more than 82% off of its meme stock high set in February.

The reason? Largely, the company’s heavily-dilutive move to raise cash through secondary offerings. The Canada-based cannabis company has seen its share count more than double, from around 918.8 million outstanding on Dec 31, 2020, to just over 2 billion today. As a result, even when accounting for the $795.23 million resulting from its equity raises, shares trade at an inflated valuation.

For now, this points to staying away from the stock. Unless one thing happens: possible market volatility results in it falling to a price not that far above the per-share value of the cash in its coffers (around 39 cents per share). At prices at or near that level, you’ll essentially get the operating business, and all its possible upside for free.

Yes, there’s still risk in buying it at 39 cents per share. One game-changing catalyst could again fail to play out as expected. The company’s other catalyst, which involves putting its war chest to work, could fail as well. Nevertheless, if you wait until the price is right, this may make for a solid high-risk opportunity.

SNDL Stock: Why it’s Best to Wait for it to Take Another Dive Before Buying

Rolling the dice on a low-priced penny stock may be tempting. Especially when it’s one like Sundial, which has seemingly found a floor at around 70 cents per share. It may look like a high-risk gamble worth making at current levels. But it’s best to wait for a price where the odds are more in your favor.

As I discussed above, that price is at or around 39 cents per share, or around 57.2% below where SNDL stock trades today. Sure, you may be thinking that another big move lower like that can’t happen. Its U.S. pot legalization catalyst could serve as a floor, preventing shares from taking another move lower.

Or is it? Legalization on the U.S. Federal Level is likely not happening until at least 2022. The extended timeline for this major catalyst may mean near-term issues outweigh it in the months ahead. For example, a shift in market sentiment from bullish to bearish. This is already starting to play out, as seen from growing fears of a stock market correction.

A market correction may only mean a temporary drop in stock prices across-the-board. Yet it may be enough to temporarily send Sundial down to a more ideal entry point. Buying it then, instead of now, could mean a situation with greater potential gains, and lower downside risk.

It’s No Slam Dunk, But Sundial’s Two Catalysts Could Still Deliver

Much of the appeal with SNDL stock is with its U.S. pot legalization catalyst. Without the lifting of restrictions on marijuana on the federal level, Canadian pot companies like this one aren’t able to enter the American market. Once it does happen? It will be a tremendous boon for it and its peers based north of the border.

With legal marijuana sales expected to hit $41 billion five years out, capturing just a small piece of the U.S. market could be a game-changer for Sundial. News of reform alone could mean a tremendous rise in its share price. Of course, it’s still not set in stone that full on pot legalization is only a year or two away. Congressional gridlock could still mean a long road lies ahead.

Fortunately, there’s another catalyst that could help boost its value in the years ahead. That would be the company’s “dual pillar” strategy, that my InvestorPlace colleague David Moadel discussed in his Sep 13 article on the stock. First, integrating its branded cannabis operations into its recently-purchased chain of Spiritleaf retail stores.

Second, it’s putting its cash to work in its SunStream Bancorp cannabis investment joint venture with private equity firm SAF Group. This venture (lending money to other early-stage cannabis ventures) may be risky, yet it could also be something with a more immediate payoff than the turnaround of its operating business.

Keep an Eye on it, as Shares Could Soon Fall to a Can’t Miss Price

At 70 cents per share, Sundial stock is overvalued, when you consider it has an enterprise value (market capitalization minus cash) of around $614.7m, versus projected sales of around $74 million in 2022. It may become a high-risk worth buying, though, if it sells off in a big way once again.

Although its two catalysts may fail to deliver, if market volatility knocks it to a price at or near its cash position, consider it high time to buy SNDL stock.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.