Tilray Looks Ready for a Breakout -- If 1 Thing Goes Right
Key Points
Tilray's fundamentals continue to improve, but that's not what is going to lead this cannabis stock to break out once again.
Rather, the Canada-based marijuana company remains highly dependent on changes in U.S. federal regulation to send it back to higher prices.
Cannabis stocks with catalysts outside of rescheduling may be better opportunities.
- 10 stocks we like better than Tilray Brands ›
Tilray Brands (NASDAQ: TLRY) is far from perfect, but the Canada-based cannabis company's fundamentals have improved recently. Tilray has been successful at both carving a path toward steady profits and strengthening its balance sheet.
While commendable, improved fundamentals alone won't get this pot stock back into hyperdrive. Rather, it is progress on U.S. cannabis rescheduling that will continue to move the needle for shares.
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 »
Image source: Getty Images.
Why better fundamentals alone won't cut it
On April 1, when Tilray reported earnings for the third fiscal quarter of 2026 (ending Feb. 28), the company had much to celebrate. Even as overall net revenue and gross profit growth came in relatively modest, at 11% and 6%, respectively, Tilray reported strong results for its international cannabis business. This segment, consisting largely of Tilray's exports of medical-grade cannabis to Europe, reported 73% year-over-year sales growth last quarter. The company also reported a 19% year-over-year improvement in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), from $9 million to $10.7 million, and a significantly lower net loss of $25.2 million.
Management also reiterated guidance for the fiscal year (ending June 30), forecasting an adjusted EBITDA range of $62 million to $72 million. Still, modest improvement isn't why the market values Tilray at around $630 million. The potential for Tilray to finally enter the U.S. remains the key factor.
Tilray's key catalyst remains elusive
Despite the recent chatter about the possible reclassification of marijuana from a Schedule I drug (indicating a high risk of abuse) to Schedule III (lower-dependency drugs with some accepted medical use) in the U.S., the timeline for full-on legalization of marijuana in the remains cloudy. Companies like Tilray need this to leverage their cultivation capacity and sell into the U.S. market.
Tilray shares will likely temporarily rally again on any rescheduling and/or legalization news. Still, there are other marijuana stocks, such as shares in companies that operate on the state level in the U.S., that have catalysts beyond just legalization and rescheduling. They may offer greater, clearer upside at this time.
Should you buy stock in Tilray Brands right now?
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 $477,813!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,320,088!*
Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 208% 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.
See the 10 stocks »
*Stock Advisor returns as of May 27, 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.
Recommended Articles
