Tilray Brands (NASDAQ: TLRY) shares have extended their decline, trading near levels not seen since June 2024. The stock has lost roughly 57% of its value year-to-date, mirroring the broader weakness in cannabis equities such as Green Thumb Industries, Trulieve Cannabis, and Curaleaf. Investors are now weighing whether this sell-off presents a buying opportunity or signals further downside.
Why Tilray Stock Is Under Pressure
The primary catalyst behind TLRY's slide is the slow pace of marijuana rescheduling in the United States. In early 2025, President Donald Trump signed an executive order directing the Department of Justice (DoJ) to expedite the reclassification of marijuana from Schedule I to Schedule III under the Controlled Substances Act. In April, Acting Attorney General Todd Blanche issued a final order moving FDA-approved marijuana products and state-licensed medical marijuana to Schedule III. However, the Drug Enforcement Administration (DEA) has since held an administrative hearing on the matter, with post-hearing briefs due August 17. A judge will then issue a final recommendation, leaving the timeline uncertain.
Tilray, a Canadian company, has stated it will expand into the U.S. market once regulatory clarity emerges. The company has developed a blueprint for a U.S. medical platform focused on research, education, and compliant access rather than adult-use retail. Such a move could be bullish, as Tilray's international business is one of its fastest-growing segments.
Beverage Business Growth Slows
Beyond regulatory headwinds, Tilray's beverage division is struggling to gain traction. In its most recent fiscal fourth quarter, total revenue rose 11% year-over-year, bolstered by acquisitions such as BrewDog and Lyphe. The beverage segment generated $254 million, up just 6% from the prior year, while cannabis revenue increased 6% to $268 million. Distribution revenue climbed 21% to $327 million, and the wellness division grew 9%. Despite these gains, the company reported a net loss of $105 million, largely due to non-cash charges.
On a positive note, management guided for adjusted EBITDA between $68 million and $75 million for the fiscal year ending May 2026, representing double-digit growth from the prior year. This outlook suggests improving operational efficiency, but the market remains focused on top-line momentum.
Technical Analysis Points to Potential Rebound
From a technical perspective, TLRY stock has broken below key support at $5.96, its March 2025 low. The shares are trading beneath the 50-day exponential moving average (EMA), and the relative strength index (RSI) is approaching oversold territory. The daily chart shows a descending channel pattern, which often precedes a reversal. If the stock holds current levels, a bounce toward the $5.96 resistance—roughly 52% above the current price—could materialize in the coming months.
For context, a similar pattern was observed in Tilray's earlier falling wedge setup, which previously signaled a potential 45% rally. While past patterns don't guarantee future results, the technical setup warrants attention from traders.
Broader Market Context
The broader market has also seen volatility, with the Dow surging 383 points amid Fed decision uncertainty. Meanwhile, cannabis stocks remain sensitive to regulatory developments, and any progress on rescheduling could provide a catalyst for the sector.
In summary, Tilray's steep decline reflects both regulatory delays and sluggish beverage growth. However, the company's cost guidance and technical oversold conditions suggest a potential near-term bounce. Investors should monitor the DEA's next steps and the company's ability to accelerate beverage revenue.
This article is for informational purposes only and does not constitute financial advice.
