Tilray Shares Experience Wild Swings Amid U.S. Cannabis Policy Shift

Tilray US88688T1007

The stock of cannabis company Tilray is undergoing a period of exceptional volatility, marked by record trading volumes. This turbulence follows a historic move by the U.S. government to reclassify cannabis from a Schedule I to a Schedule III controlled substance. A powerful rally earlier in the week has been met with a sharp pullback, indicating the market is rapidly reassessing the implications of this regulatory milestone.

During Thursday's trading session, Tilray shares closed at $12.34, representing a decline of 4.2%. This drop signaled a noticeable retreat from the intense buying pressure that had dominated the start of the week.

The trading volume tells a more dramatic story. Approximately 66.7 million shares changed hands on Thursday alone. This figure is roughly 514% higher than the three-month average daily volume of about 10.9 million shares. Such extraordinary liquidity points to intense activity from both large institutional players and short-term traders.

The market's nervous energy was already evident on Tuesday. Shares surged 27.54% to $13.94, accompanied by a volume of 46.8 million shares—about 525% above the average volume of 8.9 million at that time. The subsequent correction back to $12.34 suggests significant profit-taking followed the initial explosive move.

Key Market Data Summary:

• Current Price: $12.34
• Daily Change: -4.2%
• Trading Volume: ~66.7 million shares
• Deviation from Average Volume: ~+514%
• Primary Catalysts: Federal reclassification (Schedule III) and formation of Tilray Medical USA

A Foundational Regulatory Shift: The Move to Schedule III

At the heart of the current price action is the confirmed plan by the U.S. federal government to transfer cannabis to Schedule III. Initiated via an executive order from President Trump, this change fundamentally alters the legal landscape for cannabis companies.

Specifically, a Schedule III designation could:

• Reduce Tax Burden: The punitive taxation under Internal Revenue Code Section 280E would no longer apply, potentially freeing up substantial capital.
• Facilitate Research: Medical studies and collaborations with pharmaceutical firms would face fewer regulatory hurdles.
• Attract Institutional Investment: Major financial institutions would gain greater flexibility to invest in the sector.

However, the stock's decline following the official confirmation reveals that some of these expectations had already been priced in. Investors now appear to be focusing more closely on the long-term implementation and how companies will operationally leverage the new framework.

Strategic Expansion: Launching Tilray Medical USA

Alongside the market volatility, the company is advancing its U.S. strategy. Tilray has announced the creation of Tilray Medical USA, a new entity designed to capitalize directly on the anticipated reclassification.

This unit is intended to:

• accelerate the distribution of medical cannabis products within the United States,
• engage directly with U.S. healthcare providers and research institutions,
• gradually introduce its existing portfolio of over 200 registered medical cannabis products to the U.S. market as regulations permit.

This move reinforces Tilray's strategy to establish a strong foothold in the American medical market at an early stage.

Technical Perspective: A Battle Between $12 and $16

From a technical standpoint, the stock is trading in a pronounced high-risk zone. Thursday's intraday range stretched from $12.09 to $15.70, highlighting significant uncertainty and rapid repositioning among traders.

Key technical levels to watch include:

• Support: The area around $12.00 now acts as a critical short-term level. A sustained break below could trigger a deeper correction toward moving averages.
• Resistance: The recent peak at $15.70 has established a clear resistance zone. From a chart perspective, a sustained move above $13.94 (Tuesday's closing price) would signal that buyers are regaining control.

Conclusion: Disconnect Between News and Price Momentum

A visible gap has emerged between the strategic announcements—the Schedule III reclassification and the new U.S. medical platform—and the short-term price reaction. The current market behavior suggests dominance by speculative flows and profit-taking in the near term. The coming days will likely determine whether the $12 level holds as a firm base or if the stock continues to consolidate sideways or lower before the fundamental effects of the regulatory shift and U.S. expansion come into clearer focus.