TLDR
- Tilray stock jumped 17.52% on reports Trump considers moving marijuana from Schedule I to Schedule III
- Jefferies raised price target from $1.50 to $2.00 while maintaining Buy rating
- Stock gained 159% in three months despite 38% annual decline
- European partnership with Molteni expands international operations
- Company applied for Nasdaq extension due to share price below $1 minimum
Tilray Brands delivered a powerful 17.52% surge as cannabis reform speculation swept through Wall Street. Reports that President Trump is considering reclassifying marijuana from Schedule I to Schedule III status ignited investor enthusiasm across the sector.
The cannabis company has become the poster child for regulatory optimism. Moving marijuana to Schedule III would reduce federal restrictions and open new pathways for medical cannabis access.
This policy shift could eliminate banking, tax, and operational hurdles that have hampered cannabis companies. The change represents a potential game-changer for an industry that has struggled with regulatory uncertainty.
Jefferies analysts capitalized on the momentum by raising their Tilray price target. The investment firm increased its target from $1.50 to $2.00 while maintaining a Buy rating on the stock.
The analysts identified Tilray as “the biggest potential beneficiary” of potential reclassification. They noted that while this falls short of full legalization, it marks meaningful progress for the cannabis sector.
European Growth Engine Accelerates
Tilray announced a strategic partnership with Italian pharmaceutical company Molteni. This deal expands the company’s European footprint as international cannabis markets mature.
European cannabis revenue has exploded 112% year-over-year, excluding Australia operations. Germany leads European medical cannabis adoption, creating substantial growth opportunities.
The European strategy reduces dependence on volatile North American markets. Company executives view international operations as offering more stable regulatory environments and higher profit margins.
This geographic diversification comes as Canadian markets face price compression. The mature Canadian cannabis market continues pressuring profit margins across the industry.
Stock Performance Reflects Sector Volatility
Tilray’s recent performance tells two different stories. The stock has gained an impressive 159% over the past three months, outpacing many cannabis competitors.
However, the company remains down more than 38% over the past twelve months. This contrast highlights the boom-and-bust cycles that define cannabis investing.
Some analysts warn that valuation may have gotten ahead of fundamentals. Market observers suggest the stock could be overvalued by approximately 24% based on current projections.
The company faces operational challenges beyond regulatory uncertainty. Recent earnings showed lower-than-expected sales due to soft beer demand and delayed cannabis shipments.
Tilray has applied for a Nasdaq extension to meet minimum share price requirements. The stock trades below the required $1 threshold, creating compliance pressure.
The company explores options including a potential reverse stock split. Any reverse split would require stockholder approval to proceed.
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