A significant regulatory pivot is creating substantial momentum within the cannabis sector. Tilray Brands is emerging as a primary beneficiary of potential U.S. policy reforms, with investor enthusiasm building around the prospect of marijuana reclassification.
Quarterly Results Show Mixed Signals Amid Growth
The company’s most recent financial update for the fourth quarter of fiscal 2025 presented contrasting details. Total revenue fell short of market forecasts, although adjusted earnings per share slightly exceeded analyst expectations.
Notable strength was observed in Tilray’s international cannabis operations, which saw a substantial 71% year-over-year increase for the quarter. The company also reported continued progress in its efforts to reduce outstanding debt.
Potential U.S. Policy Overhaul Under Consideration
The entire industry is focused on a potential landmark change: the reclassification of cannabis from a Schedule I to a Schedule III substance under the U.S. Controlled Substances Act. Reports indicate the Trump administration is actively reviewing this proposal, which would represent a major shift in federal drug policy.
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Such a downgrade would fundamentally reshape the financial operating environment for cannabis companies by:
- Eliminating the burdensome IRS 280E tax penalty
- Allowing standard business tax deductions for licensed operators
- Facilitating better access to banking services and public capital markets
Market Response and Analyst Sentiment Turn Positive
Investors have responded decisively to this evolving regulatory outlook. Tilray’s equity registered strong gains on Monday, with the positive momentum carrying into Tuesday’s trading session. Trading volume on Monday surged to 65% above its average, indicating a sharp rise in investor engagement.
This renewed market interest has helped the share price move closer toward compliance with Nasdaq’s minimum price requirements, after previously trading below the necessary threshold.
The optimistic shift is also reflected in analyst actions. The financial firm Jefferies reaffirmed its “Buy” recommendation on Tilray and raised its price target, citing the company’s position to be a leading beneficiary of the anticipated regulatory reforms.
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