Stock Market Today, Dec. 18: Tilray Brands Jumps After Trump Order Spurs Cannabis Rescheduling

Tilray Brands (NASDAQ:TLRY), a global medical cannabis producer, closed Thursday at $12.34, down 4.2%. Tilray Brands IPO'd in 2018 and has fallen 94% since going public. Trading volume reached 66.7 million shares, coming in 514% above its three-month average of 10.9 million shares.

How the markets moved today

Thursday’s session saw cannabis names reacting to a Trump executive order reclassifying marijuana, and investors are watching how the U.S. cannabis industry will evolve. The S&P 500 (SNPINDEX:^GSPC) gained 0.79% to finish at 6,774, while the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 1.38% to close at 23,006. Industry peers Canopy Growth fell 12% and Cronos Group slipped 2%, underscoring how the policy change may have already been priced into the market.

What this means for investors

With rumors previously circulating about a possible cannabis reclassification, Tilray's stock had already spiked over 50% in the last couple of weeks. Today's announcement finally showed this notion to be true, as President Trump reclassified cannabis from a Schedule I to a Schedule III drug. However, after its share price initially rose today, Tilray's stock ended up declining quickly and was down 4% overall.

Ultimately, today's drop could be a classic "buy the rumor, sell the news" scenario. Or, it could stem from disappointment that cannabis wasn't greenlit for broader recreational use, which may have benefited Tilray. Regardless, the company remains a risky bet as it is barely profitable on an EBITDA basis -- but today's news should only help Tilray.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cronos Group. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.