Tilray Shares Experience Volatility Following US Cannabis Policy Shift

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The shares of cannabis producer Tilray have been characterized by significant price swings in the wake of a historic U.S. policy change regarding marijuana. A notable rally ahead of the official announcement was followed by a sharp pullback as markets entered the weekend, driven by a classic "sell the news" dynamic after President Trump's executive order to reclassify the substance.

At the core of the market movement is the presidential directive instructing the Attorney General to reschedule marijuana from Schedule I to Schedule III under U.S. controlled substances law. This shift places cannabis in a category alongside drugs like ketamine and anabolic steroids, rather than grouping it with substances such as heroin or LSD.

This regulatory adjustment holds substantial long-term implications for Tilray and the broader industry, primarily for three reasons:
* The potential elimination of the burdensome Section 280E tax code, which currently prohibits standard business deductions.
* Improved access to essential banking and financial services.
* A path toward greater acceptance and investment from institutional investors.

Immediate Market Reaction Sees Profit-Taking

Despite the fundamentally positive long-term implications, the immediate market response was negative. After climbing earlier in the week on anticipation, Tilray's stock price came under significant pressure following the formal signing of the executive order.

The details of the reform, while landmark, did not immediately meet the market's elevated expectations. The action is viewed as remaining firmly within the medical and research domain, falling short of signals toward broader recreational legalization. Consequently, many traders opted to secure profits.

• Closing Price: $11.16
• Session Change: –9.56%

This decline erased a large portion of the gains accumulated during the preceding week.

Tilray Announces Strategic US Medical Division

Aligning with the new regulatory landscape, Tilray has moved to clarify its U.S. strategy. The company announced the formation of a new subsidiary, "Tilray Medical USA," dedicated to expanding its medical cannabis operations within the United States.

This proactive move is designed to leverage Tilray's international expertise through a dedicated U.S. medical structure. The aim is to capture additional market share as barriers to entry in the American medical cannabis sector begin to lower.

Analysts Revise Targets Amid New Landscape

The volatile trading week and the definitive regulatory shift prompted several research firms to quickly update their assessments.

• Bernstein SocGen Group raised its price target substantially from $1.00 to $10.00, maintaining a "Market Perform" rating. The upgrade was attributed directly to the implications of the executive order.
• TD Cowen also set its price target at $10.00, noting that the current valuation appears ambitious relative to the near-term benefits of the reform.

The new consensus target around $10.00 suggests analysts see a higher fair value than before, yet view the current price level of $11.16 as having run somewhat ahead of itself in the short term.

Outlook: Continued Turbulence Expected

From a technical perspective, the picture remains mixed. While the move to Schedule III undeniably improves the fundamental backdrop and supports the long-term investment thesis, short-term selling pressure is currently dominant.

In the coming sessions, the $11.00 area will be watched as a key level of initial support. A failure to hold this zone could see the stock retreat toward lower support levels. Conversely, the improved regulatory foundation is expected to establish a valuation floor once the current profit-taking phase and speculative excess have been worked through the market.