Tilray Brands (TLRY) stock closed meaningfully higher on Monday after President Donald Trump urged the DOJ, during an Oval Office event, to expeditiously reclassify cannabis as a Schedule III drug.
As investors cheered this renewed urgency from the White House, TLRY broke decisively above its 50-day moving average (MA), indicating shifting momentum in favor of the bulls.
Despite today’s surge, however, Tilray shares remain down about 30% versus their year-to-date high.
Why Schedule III Reclassification Matters for TLRY Shares
If cannabis is indeed moved to Schedule III under the Trump administration, it will liberate Nasdaq-listed Tilray Brands from Section 280E of the U.S. tax code.
This punitive provision currently prevents cannabis companies from deducting standard business expenses, often resulting in effective tax rates of an alarming 70% or higher.
For TLRY shares, such a regime shift would result in a massive boost to free cash flow and unlock a path toward more consistent profitability.
Investors should also note that the cannabis stock’s relative strength index (RSI) is hovering around 56 currently, indicating significant room for further upside as the year unfolds.
Where Options Data Suggests Tilray Stock Is Headed
From an operational standpoint, Tilray has delivered genuine progress that warrants an investment.
In Q3, it generated record revenue of nearly $207 million, with adjusted EBITDA also coming in up some 19% on a year-over-year basis.
International sales jumped an exciting 73% as European markets, led by Germany, remained a key driver, making TLRY even more attractive to own for risk-tolerant investors at less than 1x sales.
Meanwhile, options pricing is skewed to the upside as well. The upper price on contracts expiring mid-September, according to Barchart, sits at $9.63 currently, indicating potential for another 33% upside from here.
What’s the Consensus Rating on Tilray Brands?
Wall Street seems to agree with options traders’ optimism on Tilray Brands as well, currently recommending owning it for the next 12 months.
According to Barchart, the consensus rating on TLRY stock remains at a “Moderate Buy,” with the mean price target of about $10 indicating potential upside of roughly 40% from here.
This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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