Tilray Brands Has Lost More Than Half of Its Value in 2026, but Here's the Bullish Case for Taking a Chance on This Highly Risky Stock

Tilray Brands (NASDAQ:TLRY) has been a bad investment for many years. Thus far in 2026, it has lost more than half of its value. It's a continuation of a troubling trend for investors who have held onto the stock, as it's down well over 95% in the past five years.

There's tremendous risk and volatility that comes with Tilray's stock. It's not a stock I'd own or buy. But there is a bullish case to be made for buying it, and it centers around potential marijuana legalization in the U.S. -- even if it isn't on the horizon just yet.

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Why Tilray's stock could surge quickly

Tilray Brands has diversified its business in recent years to involve more beverage brands and to expand into the alcohol industry. This looks to be mainly for two reasons: to manufacture growth, and also to put it in a position to have facilities in the U.S. ready to go once marijuana legalization takes place. The first one is a short-term goal, which helps the Canadian company's top line grow via acquisitions, even if the boost may be temporary. The second is part of a longer-term strategy for Tilray, simply to expand in the U.S. in any way that it can.

And the main reason investors buy shares of Tilray centers around the hopes that one day the U.S. will legalize marijuana, and it'll benefit from that development. The good news for prospective investors is that full-blown legalization doesn't have to take place for the stock to soar. In fact, Tilray's stock would likely take off well before then.

Let's look at Canada as an example. It legalized marijuana in October 2018, and even before then, marijuana stocks were surging before it took place, in anticipation of it. While they have crashed significantly since then, Aurora Cannabis and Canopy Growth, the leaders in the industry at the time, were among the hottest growth stocks to own. Their rise in value began a year before legalization took place.

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A similar phenomenon could take place even if there are serious discussions of legalization in the U.S., which would be the top market for cannabis in the world.

Investors should be aware of the risks before taking a chance on Tilray

Tilray isn't a stock that's going to be suitable for most growth investors, even those with some risk tolerance. This is a stock that's highly risky and whose future is uncertain. It remains unprofitable, and while U.S. marijuana legalization would certainly light a fire under the stock, there's no guarantee if or when that might happen. The stock is primarily suitable for high-risk investors who are willing to take on the significant uncertainty that comes with the stock.

There is a bullish case for Tilray's stock, but whether the story ends up playing out as investors hope is by no means a certainty.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.