TLDR
- Tilray stock soared 17.52% following reports that President Trump is considering reclassifying marijuana from Schedule I to Schedule III
- Jefferies raised its price target from $1.50 to $2.00 while maintaining a Buy rating on the cannabis company
- The stock has gained 159% over the past three months despite being down 38% over the past year
- Company announced partnership with Italian pharmaceutical firm Molteni for European market expansion
- Tilray applied for a Nasdaq extension as its share price trades below the required $1 minimum
Tilray Brands has captured Wall Street’s attention with a dramatic 17.52% surge following reports that President Trump is considering marijuana reclassification. The cannabis company’s shares rocketed higher as investors digested news of potential policy changes that could reshape the entire industry.
The proposed shift would move marijuana from its current Schedule I status to the less restrictive Schedule III category. This change could eliminate many banking, tax, and operational hurdles that have plagued cannabis companies for years.
Jefferies analysts jumped on the momentum by raising their price target from $1.50 to $2.00 while keeping their Buy rating intact. The investment firm identified Tilray as “the biggest potential beneficiary” of these regulatory developments.
The timing couldn’t be more interesting for Tilray, which has endured a rollercoaster year. Despite the recent surge, the stock remains down more than 38% over the past twelve months.
However, the three-month picture tells a different story entirely. Tilray has gained an impressive 159% during this period, outpacing many competitors in the cannabis space.
European Expansion Strategy Takes Shape
Beyond domestic policy developments, Tilray announced a strategic partnership with Italian pharmaceutical company Molteni. This move deepens the company’s European market presence as cannabis markets continue maturing across the continent.
European cannabis revenue has grown 112% year-over-year, excluding Australia operations. Germany leads the charge in medical cannabis adoption, creating opportunities for international expansion.
Company executives view European markets as offering more stable regulatory environments. They also see potentially higher profit margins compared to the increasingly competitive Canadian and U.S. markets.
The European venture represents Tilray’s broader strategy to diversify geographically. This approach aims to reduce dependence on the volatile North American market where regulatory uncertainty persists.
Financial Performance Shows Mixed Results
Recent earnings revealed challenges for the cannabis giant. Lower-than-expected sales stemmed from soft beer demand and delayed cannabis shipments.
The company has quietly expanded beyond traditional cannabis offerings. New beverages and spirits products represent part of a broader strategy to build a diversified consumer goods platform.
This diversification approach aims to reduce exposure to cannabis market volatility. The strategy leverages existing distribution networks and brand recognition in adjacent categories.
Cannabis products still represent the majority of company revenues. However, the expanded portfolio shows early promise in creating additional revenue streams.
Some market observers warn that Tilray’s valuation may have gotten ahead of fundamentals. Analysts suggest the stock could be overvalued by approximately 24% based on current projections.
The valuation concerns center on ambitious assumptions about international expansion success. Questions remain about whether the 112% European growth rate is sustainable as markets mature.
Tilray faces several operational challenges that could impact future performance. Persistent delays in U.S. federal legalization continue creating uncertainty for the cannabis sector.
Price compression in Canada’s mature cannabis market pressures profit margins. Increased competition from established players and new entrants could limit market share gains.
The company’s success depends on executing international expansion plans while navigating complex regulations. Investors watch closely for concrete progress on policy reforms and tangible European results.
Tilray has applied for an extension to meet Nasdaq’s minimum share price requirements. The company explores several options including a potential reverse stock split that would need stockholder approval.
Trading below the $1 minimum required by Nasdaq creates additional pressure. The compliance issue adds another layer of complexity to the company’s current situation.
Current market conditions show Tilray stock up 42% over the past six months. The company maintains a “GOOD” overall financial health score according to investment analysis.
