ewsba.se
Written by Thomas Niel for The Motley Fool->
Like other marijuana stocks, Tilray briefly rallied late last month on news that the U.S. Department of Justice was rescheduling regulated marijuana.
Pretty soon after, however, Tilray and its peers gave back these gains, and then some.
This whipsaw price action isn't surprising, given that rescheduling alone doesn't open the door for companies like Tilray to enter the U.S. marijuana market.
Marijuana stocks experienced a short-lived surge back on April 22. Tilray Brands (NASDAQ: TLRY) was no exception.
The boost was triggered by news of the Department of Justice's plans to reschedule regulated marijuana products from Schedule I to Schedule III of the Controlled Substances Act.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
However, soon after this rally took shape, these same stocks coughed back their gains, and then some. After surging from around $7 to around $8 per share in a matter of hours, Tilray stock dropped closer to $6.
To some degree, there may have been "buy the rumor, sell the news" at play in cannabis stocks with the rescheduling news. However, it's not surprising that the market quickly went from bullish to bearish regarding this news.
For one, the announcement, issued by the Department of Justice's Drug Enforcement Administration, only granted immediate rescheduling of FDA-approved and state-regulated medical marijuana products from Schedule I to Schedule III. Proposed plans to fully reschedule marijuana from Schedule I to Schedule III are pending an administrative hearing process, albeit an expedited one.
Second, even a full-on rescheduling of marijuana, if approved immediately, wouldn't matter much for Cannabis companies like Tilray.
Rescheduling does matter greatly. Moving from Schedule I to Schedule III takes marijuana out of the same league as heroin, and places it in the same category as prescription drugs. Under Schedule III, cannabis companies would also no longer be subject to Section 280E tax rules, which basically disallow all regular expense deductions for marijuana businesses.
Still, it's not just rescheduling that needs to happen on the federal level. Tilray and its Canada-based peers need full legalization to occur as well.
In the meantime, stick to the sidelines with this risky growth stock. As regulatory progress remains a work in progress, long-standing company-specific issues, including persistent losses and the poor performance of Tilray's line of cannabis-infused beverages, could keep weighing on shares.
Before you buy stock in Tilray Brands, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tilray Brands wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!*
Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 202% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 3, 2026.
Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
This data feed is not available at this time.