A landmark move to reclassify cannabis in the United States has ignited a powerful rally for Tilray Brands, Inc. The company’s stock posted a double-digit percentage gain on substantial volume following confirmation that President Donald Trump intends to sign an executive order directing the Department of Justice to reschedule marijuana.
The Catalyst: A Pivotal Policy Change
The surge was driven by news that President Trump is set to sign an order at 1:30 PM Eastern Time instructing federal agencies to move marijuana from Schedule I to Schedule III under the Controlled Substances Act. This long-awaited regulatory shift is viewed as a critical breakthrough for the legal cannabis industry, promising to reduce longstanding operational and financial barriers.
Key Market Developments:
* Policy Momentum: The announced downgrade from Schedule I to Schedule III.
* Price Action: Shares traded within an intraday range of $12.95 to $13.75.
* Sector-Wide Impact: Broad-based gains across cannabis equities and related ETFs.
* Post-Split Trading: Tilray shares are now trading in a new price bracket following a 1-for-10 reverse stock split executed on December 1.
During the session, the stock reached a high of $13.75. This advance comes as the share price consolidates following the recent reverse split, which was enacted to maintain Nasdaq listing requirements and enhance appeal to institutional investors. While the nominal share price appears higher, the company’s market capitalization remains fundamentally unchanged by the corporate action.
The positive sentiment swept across the sector. The AdvisorShares Pure US Cannabis ETF (MSOS) climbed approximately 9.5%. Competitor Canopy Growth Corporation saw its shares hit a daily high of $2.09. Trading volume for Tilray significantly exceeded its 10-day average, indicating robust interest from both retail and institutional market participants.
Commercial Strategy and Product Expansion
Beyond the political catalyst, Tilray continues to advance its commercial strategy. On December 11, the company launched new “Amped Live Resin Liquid Diamond” cartridges for the Canadian adult-use market. This initiative aims to capture greater market share in the high-potency product segment, which is known for its strong revenue potential.
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These product launches occur alongside the financial and structural repositioning following the reverse split. The corporate maneuver is designed to align with exchange requirements and potentially broaden the investor base.
Analyst Perspectives in a Transition Phase
The recalibration of share structure is influencing analyst models. On December 14, TD Cowen updated its financial framework, maintaining a “Buy” rating but adjusting its price target to $10 per share. The firm cited the adjusted share count effect and increasing competitive pressures as key reasons.
The broader analyst community is currently in a transitional period. Some published price targets already fully reflect the new post-split share structure, while others are still based on pre-split levels. These older targets appear significantly lower when adjusted for the split, corresponding to pre-split values between approximately $1.58 and $1.95. Concurrently, more optimistic scenarios with target prices nearing $16 are also in discussion. The current wide dispersion in analyst targets is largely a technical effect of these ongoing model adjustments.
Forward Look: Execution and Financials Take Center Stage
The focus now shifts to the speed and specifics of the Department of Justice’s implementation of the rescheduling directive. For Tilray, a Schedule III classification could eventually pave the way for a more viable U.S. market entry strategy, potentially through acquisitions. Crucially, it would allow the company to significantly reduce its tax burden under Internal Revenue Code Section 280E, thereby improving cash flows.
Several factors will be critical in the coming weeks:
* The stock’s ability to sustain a closing price and find stability above key technical levels around $13.
* Further details regarding the regulatory timeline from the Department of Justice.
* The upcoming quarterly earnings report, which will be the first to reflect the new share structure and may provide insights into the U.S. strategy in light of the potential reclassification.
From a technical standpoint, a decisive move above $13.50 signals renewed upward momentum. Fundamentally, however, the sustainability of this rally will depend on the extent to which the promised policy change translates into tangible economic benefits for Tilray’s operations and bottom line.
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