Trump's Marijuana Rescheduling Push Is Back in Focus. Is Tilray Stock Finally a Buy?

President Donald Trump directed federal officials to move quickly on marijuana rescheduling, and that effort just survived another legal challenge. Last week, a federal appeals court rejected a request from marijuana opponents to temporarily block the administration from moving forward with broader rescheduling while their lawsuits are considered. The ruling doesn't guarantee marijuana will ultimately move from the stringent Schedule I to the more lenient Schedule III, but it keeps the process alive. And Tilray Brands (NASDAQ: TLRY) could be one of the marijuana stocks to watch if it happens.

What rescheduling would actually change

Moving marijuana to Schedule III wouldn't federally legalize recreational cannabis. Interstate marijuana commerce wouldn't suddenly become legal, and Tilray wouldn't be able to start shipping Canadian recreational cannabis into the U.S. But Schedule III would still represent one of the biggest changes in federal marijuana policy in decades.

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The Trump administration has already placed FDA-approved marijuana products and qualifying state-licensed medical marijuana products into Schedule III, which is reserved for drugs that have some some medical uses. A separate DEA process is considering the broader removal of marijuana from Schedule I. The DEA has argued that marijuana no longer meets Schedule I requirements because it has an accepted medical use and an abuse and dependency profile more consistent with Schedule III.

That broader change could eventually make it easier to conduct cannabis research and expand medical marijuana opportunities. And Tilray has spent years building a business that could benefit from exactly that kind of market.

Tilray is already a major medical cannabis supplier internationally, particularly in Europe. International medical cannabis revenue increased 34% in fiscal 2026. Management has also specifically identified U.S. rescheduling as an opportunity to eventually expand Tilray Medical into the American market. That's a much more realistic catalyst than assuming Schedule III somehow turns Tilray into a U.S. recreational marijuana company overnight.

More than just weed

There was a time when buying Tilray was essentially a bet on cannabis legalization in the U.S. That's no longer the case.

Tilray generated a record $915 million in revenue during fiscal 2026 ended May 31, and cannabis is now only one part of the business. The company also owns alcohol brands, wellness products and, following its acquisition of BrewDog, a sizable hospitality and beverage operation. Tilray's balance sheet has improved, too.

The company finished fiscal 2026 with about $235 million in cash, restricted cash and marketable securities, while reducing net debt to just $700,000. Management also reported about $18.2 million in positive operating cash flow excluding working-capital changes, a 157% improvement, and now expects adjusted earning before interest, taxed, and depreciation (EBITDA) of $68 million to $75 million in fiscal 2027. Make no mistake: those aren't the numbers of a cannabis company waiting around for Washington to save it.

I'm still not sold

Federal marijuana reform has been in sight for years. Schedule III was first formally proposed back in May 2024, and the process has been delayed repeatedly by administrative proceedings, political changes, and legal challenges. Those legal challenges aren't over, either.

The appeals court merely refused to pause the rescheduling process. It did not reject the opponents' underlying cases. The court has consolidated three challenges to the broader rescheduling proposal and directed the parties to submit a proposed briefing schedule. So plenty can still go wrong.

There's also another issue. Even if broader Schedule III rescheduling happens, Tilray isn't necessarily the company that benefits most immediately. U.S. multistate cannabis operators could see a much more direct financial impact from reform, particularly if it changes how federal tax rules apply to their businesses. Tilray's potential benefit is more about opening doors for its medical cannabis platform. That's valuable. But it's not the same thing as suddenly gaining access to the entire U.S. recreational cannabis market.

Is Tilray finally a buy?

To be fair, I'm closer than I've been in years to buying Tilray. Tilray has record revenue, has essentially eliminated its net debt, is generating improving cash flow, and already has a substantial international medical cannabis operation. Now there's a legitimate federal catalyst that could eventually give that business another large market to pursue.

But I wouldn't suggest buying Tilray solely because Trump wants marijuana moved to Schedule III. I'd buy it only if you're comfortable owning the company even if broader federal rescheduling takes longer than expected -- or never even happens.

A few years ago, Tilray needed U.S. legalization to justify much of the excitement surrounding the stock. Today, the underlying business is in better shape, while federal reform has become potential upside rather than the entire investment thesis.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.