What Happened?
Shares of cannabis company Tilray Brands (NASDAQ: TLRY) fell 1.6% in the afternoon session after a strike in British Columbia expanded to include the province's cannabis distribution warehouse, halting the acceptance and shipment of orders.
The job action by the BC General Employees Union (BCGEU) led to the temporary closure of the BC Liquor Distribution Branch’s (LDB) cannabis distribution center. According to a notice from the LDB, this meant that until further notice, orders would not be accepted, assembled, or shipped. This disruption to a major supply channel in Canada created uncertainty for cannabis producers like Tilray. The negative operational news appeared to overshadow a separate, more neutral report from the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN), which showed relative stability in the number of banks willing to service cannabis clients.
The shares closed the day at $1.20, down 1.6% 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, it’s free.
What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 74 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 10 days ago when the stock gained 5.2% on the news that the company and other cannabis stocks rose after a House committee approved a bill that includes a provision protecting state-legal medical marijuana programs from federal interference.
While the bill also aims to block the current administration from rescheduling marijuana, investors appear to be focused on the positive aspect of the legislation. The bill continues a rider that prevents federal funds from being used to interfere with the implementation of state medical cannabis laws. This provides a degree of stability and protection for cannabis companies operating in states where medical use is legal, reducing a key business risk. The legislative action comes about a month after the administration announced it was reviewing the federal classification of cannabis, a process that has not yet concluded.
Tilray is down 17.8% since the beginning of the year, and at $1.20 per share, it is trading 32.2% below its 52-week high of $1.77 from November 2024.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
