What Happened?
Shares of cannabis company Tilray Brands (NASDAQ: TLRY) fell 9% in the afternoon session after the company's stock fell in a 'buy the rumor, sell the news' reaction as the U.S. government moved to reschedule cannabis.
President Trump signed an executive order directing federal agencies to reclassify cannabis from a restrictive Schedule I to a less-regulated Schedule III substance. While this development was seen as a positive step for the industry, cannabis stocks had already rallied on rumors leading up to the announcement. The confirmation of the news appeared to have prompted investors to take profits. The decline also might have stemmed from disappointment that the change did not greenlight broader recreational use.
The shares closed the day at $11.15, down 9.6% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tilray? Access our full analysis report here.
What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 93 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 2 days ago when the stock dropped 5.2% on the news that the stock gave back some of its recent gains, which were fueled by reports that the U.S. administration was considering reclassifying marijuana.
The drop followed a significant rally for the stock, which had climbed roughly 75% over the previous five trading days. The initial surge was triggered by news that the administration was actively considering changing marijuana's classification from a Schedule I to a Schedule III substance, viewing it as a less dangerous drug. This potential policy shift created significant volatility, with the stock jumping more than 27% in the prior day's session. The subsequent decline suggested that some investors were taking profits after the sharp run-up, as no final decision on the reclassification had been made.
Tilray is down 23.9% since the beginning of the year, and at $11.12 per share, it is trading 47.1% below its 52-week high of $21 from October 2025.
The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave.
