What Happened?
Shares of cannabis company Tilray Brands (NASDAQ:TLRY) jumped 5.2% in the morning session after the company and other cannabis stocks rose after a House committee approved a bill that includes a provision protecting state-legal medical marijuana programs from federal interference.
While the bill also aims to block the current administration from rescheduling marijuana, investors appear to be focused on the positive aspect of the legislation. The bill continues a rider that prevents federal funds from being used to interfere with the implementation of state medical cannabis laws. This provides a degree of stability and protection for cannabis companies operating in states where medical use is legal, reducing a key business risk. The legislative action comes about a month after the administration announced it was reviewing the federal classification of cannabis, a process that has not yet concluded.
After the initial pop the shares cooled down to $1.10, up 4.3% from previous close.
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What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 71 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 dropped 4.6% as reports revealed Department of Justice canceled pending cannabis rules. This regulatory setback adds to a host of challenges for the cannabis producer. The company is already under pressure to meet Nasdaq's listing standards, which require a minimum share price that Tilray has struggled to maintain. To address this, the company has been exploring options like a reverse stock split. Compounding these issues, Tilray reported a significant net income loss of approximately $1.27 billion for the quarter ended May 31, 2025, highlighting its difficult financial position in a competitive market.
Tilray is down 24.7% since the beginning of the year, and at $1.10 per share, it is trading 39.2% below its 52-week high of $1.81 from September 2024.
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