What Happened?
Shares of cannabis company Tilray Brands (NASDAQ: TLRY) jumped 40.8% in the afternoon session after reports suggested the Trump administration planned to ease federal restrictions on marijuana by reclassifying it as a less dangerous substance.
This potential move would shift cannabis from a Schedule I drug, a category that includes substances like heroin, to a Schedule III drug, which is similar to some common prescription painkillers. Such a change, while not legalizing marijuana outright, would significantly reduce federal oversight. The reclassification was expected to expand research access and improve profitability for cannabis companies. For the industry, the change pointed to potential benefits like lower taxes and the lifting of banking rules that have long restricted financial activities. The news ignited a broad rally across the entire cannabis sector.
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What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 90 moves greater than 5% over the last year. But moves this big are rare even for Tilray and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 16 days ago when the stock dropped 16.4% on the news that the company announced it would implement a 1-for-10 reverse stock split.
A reverse stock split combines multiple shares into one, which increases the price per share without changing the company's total value. Although management noted the move was intended to make the company more attractive to institutional investors and cut up to $1 million in yearly administrative costs, investors reacted negatively. Such actions can be viewed by the market as an effort to keep a stock's price above an exchange's minimum listing requirements. The significant drop in the stock's price reflected these concerns.
Tilray is down 15.6% since the beginning of the year, and at $12.32 per share, it is trading 41.3% below its 52-week high of $21 from October 2025.
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