What Happened?
Shares of cannabis company Tilray Brands (NASDAQ: TLRY) fell 5.7% in the afternoon session after a recent rally in cannabis stocks, fueled by hopes of federal marijuana rescheduling in the U.S., reversed course.
The decline represents a sharp pullback for the sector after significant gains the previous day, when Tilray jumped over 7%. The recent investor optimism was sparked by comments that a decision on rescheduling marijuana could come “within weeks” and the filing of a new bill by Congressional Democrats to deschedule cannabis entirely. However, Friday's retreat suggests investor skepticism about the prospects of federal action.
The shares closed the day at $1.39, down 5.1% from previous close.
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What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 67 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 5.5% on the news that the company announced the launch of three new EU-GMP certified medical cannabis strains in Germany. The new products, offered under the company's Good Supply brand, are intended to improve patient and pharmacy access in what is considered Europe's largest medical cannabis market. This expansion reinforces Tilray's strategy to grow its influential global presence. The positive momentum for the stock may also be supported by other recent developments. On August 25, Jefferies raised its price target on the company, citing potential U.S. government policy changes regarding cannabis rescheduling. Additionally, on August 27, Tilray announced it had regained compliance with Nasdaq's minimum bid price requirement.
Tilray is down 6.2% since the beginning of the year, and at $1.37 per share, it is trading 24.3% below its 52-week high of $1.81 from September 2024.
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