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Cannabis Stock Tilray Brands Loses 19% in a Month: Time to Sell or Hold?
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Once considered a darling of the cannabis sector, shares of Tilray Brands (TLRY - Free Report) have steadily declined over the past few years due to regulatory hurdles and intensifying competition.
After becoming one of the first cannabis stocks to list on a U.S. exchange and briefly surpassing the $200 mark, Tilray has now fallen into the penny stock territory and faces the threat of a NASDAQ delisting.
Let’s delve into the company’s fundamentals to gain a better understanding of how to play the stock amid this price decline.
TLRY’s Cannabis Business Continues to Falter
Despite having a diversified business model, Tilray’s top line continues to be negatively impacted by the deteriorating core cannabis business. Though the company listed its stock on the NASDAQ in 2018 with the hope of marijuana legalization in the country, it remains illegal at the federal level to this day.
In its third-quarter results of fiscal 2025 (year ending May 2025), Tilray’s cannabis revenues declined 14% year over year to $54.3 million. Although the majority of revenues came from Canada, where the company occupies a significant market share, the small market size and saturation pose a challenge.
Per a Forbes article, Tilray commands 10% of the Canadian market, which is valued at $4 billion. On the contrary, the U.S. market is valued at $32 billion for legal marijuana but remains out of bounds due to federal laws. While Tilray also generates revenues from cannabis sales in non-Canadian markets, that segment just represents a small slice of the company’s overall revenues.
Compounding these issues, Tilray is also facing financial struggles. As a result, total revenues for the quarter declined 1% year over year, and the company even slashed its full-year sales guidance to $850-$900 million, down from the prior range of $0.95-$1.0 billion.
Due to the above factors, Tilray has entered the penny stock category and has triggered a delisting warning from NASDAQ. The company has proposed a reverse stock split, ranging from a ratio of 1-to-10 to 1-to-20, intended to boost the stock price above the $1 threshold, which will be voted on at a special shareholders' meeting on June 10.
From Pot to Pints: Tilray’s Bold Diversification Push
Faced with stalled growth in Canadian cannabis and no legal pathway to sell THC products in the United States, Tilray has shifted focus. Over the past few years, the company has acquired over a dozen beer and spirits brands, including deals with Anheuser-Busch and Molson Coors. Tilray is currently the fourth-largest craft brewer in the United States, with regional labels like Montauk Brewing, SweetWater, and Breckenridge Brewery under its umbrella.
The company has also entered the fast-growing hemp-based THC beverage market, all thanks to the 2018 Farm Bill that legalized hemp-derived cannabinoids. Tilray is selling intoxicating beverages under brands like Liquid Love and Happy Flower across multiple U.S. states. While these drinks currently represent a modest share of revenues, they remain a promising growth category with long-term potential.
TLRY Stock Hit by Financial Pressure and Bleak Estimates
Shares of Tilray Brands have plunged 68% year to date against the industry’s 4% growth, as seen in the chart below. The fall in share price likely reflects the company’s ongoing financial challenges and continued uncertainty around U.S. marijuana legalization.
Image Source: Zacks Investment Research
Estimates for TLRY’s loss per share for 2025 and 2026 have widened significantly in the last 60 days.
Image Source: Zacks Investment Research
How to Play TLRY Stock?
While Tilray’s efforts to diversify into craft beverages and THC drinks show some strategic foresight, the persistent decline in its core cannabis business, lack of profitability, and NASDAQ delisting threat make it a risky bet in the near term. With a Zacks Rank #4 (Sell), the stock offers limited upside and elevated risk for conservative investors.
For those still interested in cannabis exposure but wary of Tilray’s volatility, it may be worth revisiting some unconventional names with stronger fundamentals. In a previous article, we highlighted three such stocks — Philip Morris International (PM - Free Report) , Corbus Pharmaceuticals (CRBP - Free Report) and Jazz Pharmaceuticals (JAZZ - Free Report) — all of which are blending cannabis-related ventures with stable, diversified operations. In our opinion, Philip Morris, Corbus, and Jazz Pharma offer a more balanced and strategic way to tap into the cannabis sector’s growth without betting solely on its most speculative players.
Image: Bigstock
Cannabis Stock Tilray Brands Loses 19% in a Month: Time to Sell or Hold?
Once considered a darling of the cannabis sector, shares of Tilray Brands (TLRY - Free Report) have steadily declined over the past few years due to regulatory hurdles and intensifying competition.
After becoming one of the first cannabis stocks to list on a U.S. exchange and briefly surpassing the $200 mark, Tilray has now fallen into the penny stock territory and faces the threat of a NASDAQ delisting.
Let’s delve into the company’s fundamentals to gain a better understanding of how to play the stock amid this price decline.
TLRY’s Cannabis Business Continues to Falter
Despite having a diversified business model, Tilray’s top line continues to be negatively impacted by the deteriorating core cannabis business. Though the company listed its stock on the NASDAQ in 2018 with the hope of marijuana legalization in the country, it remains illegal at the federal level to this day.
In its third-quarter results of fiscal 2025 (year ending May 2025), Tilray’s cannabis revenues declined 14% year over year to $54.3 million. Although the majority of revenues came from Canada, where the company occupies a significant market share, the small market size and saturation pose a challenge.
Per a Forbes article, Tilray commands 10% of the Canadian market, which is valued at $4 billion. On the contrary, the U.S. market is valued at $32 billion for legal marijuana but remains out of bounds due to federal laws. While Tilray also generates revenues from cannabis sales in non-Canadian markets, that segment just represents a small slice of the company’s overall revenues.
Compounding these issues, Tilray is also facing financial struggles. As a result, total revenues for the quarter declined 1% year over year, and the company even slashed its full-year sales guidance to $850-$900 million, down from the prior range of $0.95-$1.0 billion.
Due to the above factors, Tilray has entered the penny stock category and has triggered a delisting warning from NASDAQ. The company has proposed a reverse stock split, ranging from a ratio of 1-to-10 to 1-to-20, intended to boost the stock price above the $1 threshold, which will be voted on at a special shareholders' meeting on June 10.
From Pot to Pints: Tilray’s Bold Diversification Push
Faced with stalled growth in Canadian cannabis and no legal pathway to sell THC products in the United States, Tilray has shifted focus. Over the past few years, the company has acquired over a dozen beer and spirits brands, including deals with Anheuser-Busch and Molson Coors. Tilray is currently the fourth-largest craft brewer in the United States, with regional labels like Montauk Brewing, SweetWater, and Breckenridge Brewery under its umbrella.
The company has also entered the fast-growing hemp-based THC beverage market, all thanks to the 2018 Farm Bill that legalized hemp-derived cannabinoids. Tilray is selling intoxicating beverages under brands like Liquid Love and Happy Flower across multiple U.S. states. While these drinks currently represent a modest share of revenues, they remain a promising growth category with long-term potential.
TLRY Stock Hit by Financial Pressure and Bleak Estimates
Shares of Tilray Brands have plunged 68% year to date against the industry’s 4% growth, as seen in the chart below. The fall in share price likely reflects the company’s ongoing financial challenges and continued uncertainty around U.S. marijuana legalization.
Image Source: Zacks Investment Research
Estimates for TLRY’s loss per share for 2025 and 2026 have widened significantly in the last 60 days.
Image Source: Zacks Investment Research
How to Play TLRY Stock?
While Tilray’s efforts to diversify into craft beverages and THC drinks show some strategic foresight, the persistent decline in its core cannabis business, lack of profitability, and NASDAQ delisting threat make it a risky bet in the near term. With a Zacks Rank #4 (Sell), the stock offers limited upside and elevated risk for conservative investors.
For those still interested in cannabis exposure but wary of Tilray’s volatility, it may be worth revisiting some unconventional names with stronger fundamentals. In a previous article, we highlighted three such stocks — Philip Morris International (PM - Free Report) , Corbus Pharmaceuticals (CRBP - Free Report) and Jazz Pharmaceuticals (JAZZ - Free Report) — all of which are blending cannabis-related ventures with stable, diversified operations. In our opinion, Philip Morris, Corbus, and Jazz Pharma offer a more balanced and strategic way to tap into the cannabis sector’s growth without betting solely on its most speculative players.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.