Tilray Trades Below $5 With Record Fiscal Revenue on the Books. What's Holding the Stock Back?

Tilray Brands (NASDAQ: TLRY) started out as a marijuana company. When it first came public, investors were enamored of pot stocks and the shares rose dramatically. But the marijuana story didn't live up to investors' elevated expectations, and Tilray's stock, along with the rest of the marijuana sector, plunged. Today, Tilray is taking a different approach, and it is starting to show positive results. But investors appear unwilling to give the stock the benefit of the doubt. Here's what's going on.

Is Tilray Brands trying to become a consumer staples company?

The big story with Tilray Brands right now really isn't marijuana. What investors really need to pay attention to is management's efforts to add other products to the portfolio, including alcoholic beverages and CBD-infused items. Moreover, Tilray has been focusing heavily on its brands as it seeks to transition into "a global lifestyle and consumer packaged goods company leading at the nexus of the beverage, cannabis, and wellness industries."

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This is a major corporate overhaul, with Tilray effectively seeking to compete with consumer staples companies. It is a highly competitive industry where scale can be an important differentiator. That's an issue, since Tilray's market cap is a tiny $600 million. Distribution, marketing, research and development all involve material costs. It can be difficult to differentiate a company if its revenues are a rounding error relative to larger peers. And that's very much the case here, considering that Coca-Cola (NYSE: KO) generated $13.4 billion in sales in the second quarter of 2026.

That puts Tilray's record fiscal 2026 revenues of $915 million into perspective. Coca-Cola made over 13x that in just a single quarter. While it is true that comparing Tilray to one of the world's largest consumer-staples companies probably isn't fair, it does help to show just how small Tilray really is as a business.

Tilray is achieving solid success, but there's still more to do

The next big issue is that Tilray isn't profitable. Despite record revenues, the company still lost $1.09 per share in fiscal 2026. That was a vast improvement over the $24.56-per-share loss in fiscal 2025, but a tiny, money-losing company in the middle of a business overhaul isn't the type of stock most investors should buy. Tilray is only appropriate for risk takers.

That said, it has done a very good job of diversifying its business beyond marijuana. At this point, it also has a significant business in the craft-brew niche, which it recently expanded through the acquisition of BrewDog. Moreover, revenues increased across all its business segments in fiscal 2026, suggesting the company is executing fairly well. Management just has to find a way to turn that success into profits.

From a big-picture perspective, Tilray's diversification effort and focus on becoming a consumer-staples brand manager are probably good choices. However, given the history of the marijuana industry and the company's ongoing losses, investors aren't willing to afford the company the benefit of the doubt as it looks to turn itself into a profitable business. That's entirely understandable.

Tilray: Record revenues aren't enough

At the end of the day, Tilray needs to prove it can be a sustainably profitable business. Record revenues are moving the company in the right direction, as is its effort to diversify. However, until earnings turn positive, most investors are unlikely to buy Tilray stock. So, for now, Tilray remains a business that only the most aggressive investors should buy. But given the changes it is making, it might still be one you want to keep on your watch list, even if you aren't willing to own it right now.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.