TLRY Stock Loses 38% in a Month: Should You Buy the Dip?

Core Insights - Shares of Tilray Brands (TLRY) have been declining steadily, attributed to recent U.S. legislation tightening the legal definition of hemp and a reverse stock split that has negatively impacted investor sentiment [1][2]. Regulatory Changes - U.S. lawmakers passed a provision that redefines hemp, allowing only products with no more than 0.4 milligrams of THC per container, which significantly affects the hemp-derived THC beverage and snack industry [3][4]. - This new rule, expected to take effect in nearly a year, will reclassify many existing low-dose THC products as marijuana, making them illegal under federal law [4]. - The regulatory change introduces uncertainty into a previously fast-growing category for Tilray, complicating future expansion into hemp-derived THC beverages [5]. Company Performance - Despite the challenges, Tilray's cannabis revenues rose 5% year over year to $64.5 million, supported by strong demand in the Canadian adult-use market and expanding international sales [9][10]. - Canadian adult-use revenues increased by 12%, affirming Tilray's position as the largest legal cannabis producer in Canada by revenues [10]. - International sales grew by 10%, particularly in Germany and Italy, aided by Tilray's CC Pharma distribution platform [10][11]. Product Development - Tilray has expanded its European presence by launching five new cannabis flower products in Germany and introduced its first medical cannabis edible in Australia, demonstrating a commitment to innovation [11]. Stock Performance - Tilray's shares have dropped 42% year to date, contrasting with the industry's 4% growth [12]. - Estimates for Tilray's loss per share for fiscal years 2026 and 2027 have improved over the last 60 days, indicating some positive adjustments in expectations [14]. Investment Outlook - While the recent sell-off reflects genuine concerns, hemp-derived THC products account for a small portion of Tilray's total revenues, limiting the financial impact of the regulatory shift [15]. - The company's core cannabis operations continue to show progress, supported by rising international medical sales and product launches [15]. - Tilray's diversification into craft beverages and wellness brands adds stability, and its improving cost structure enhances competitive positioning [15]. - The stock remains attractive in the near term, especially as investors await clarity on U.S. federal cannabis reforms [16].