Maybe it's best to cut your losses and move on.While it has been a volatile ride due to the pandemic, economic challenges, and geopolitical instability, the stock market has delivered strong returns over the past five years. Plenty of companies have failed to keep up with this pace, though. One of them is Tilray Brands (TLRY 0.96%), a leader in the cannabis industry. A wealth destroyerSince 2020 (and even before), Tilray's financial results have been unimpressive, at best. The company faced significant chal ...

Key Points No less than three U.S. Republican senators expressed support for marijuana law reform in a set of recent interviews. President Trump is currently mulling a significant change in the legal designation of the drug. 10 stocks we like better than Tilray Brands › The slow-walk process that is potential de facto marijuana legalization in this country seemed to take a little step forward on Tuesday. This positively affected certain cannabis stocks based in both the U.S. and Canada, notably Til ...

Industry Overview - Cannabis stocks have experienced significant growth, with Curaleaf's stock rising nearly 90% year-to-date, making it the top performer among tracked pot stocks [1] - The market is optimistic about potential federal legalization of marijuana in the U.S., which could transform the $80 billion market [4] Recent Developments - President Trump's recent comments on marijuana reclassification have intensified the rally, with the AdvisorShares Pure US Cannabis ETF climbing 28% in its best day since 2022 [2] - The administration is considering moving marijuana from Schedule I to Schedule III status, which would reduce tax burdens on cannabis companies and facilitate institutional investment [3] Company Performance - Curaleaf reported mixed second-quarter results, with revenue of $315 million, down 8% year-over-year due to domestic price pressures [5] - The international division of Curaleaf grew by 17% sequentially and 62% year-over-year, driven by demand in Germany and the UK [5] - Curaleaf operates in 17 U.S. states and 15 countries, with international revenue expected to become a top contributor by year-end [6] Market Dynamics - The increase in patient numbers in Germany from 150,000 to 1.2 million within a year highlights the growth potential in international markets [6] - Domestic pricing challenges are attributed to unregulated hemp products rather than competition within the legal cannabis sector [7]

Market Performance - Market indexes experienced gains, with the Dow up +68 points, S&P 500 gaining +17 points, and Nasdaq increasing +107 points, while the Russell 2000 rose +2 points [2] - The market was influenced by a government shutdown threat and OPEC+'s decision to raise oil production by 137K barrels per day, leading to a -3.8% drop in WTI prices and a -2.5% decline in Exxon Mobil and BP stocks [1] Housing Market - Pending Home Sales rose by +4.0% in August, surpassing expectations and reversing a previous downward trend, aided by slightly easing mortgage rates [3] - Newly-built homes also saw an increase, with homebuilder stocks like Lennar, Pulte Home, and KB Home rising more than +1% due to pent-up demand [4] Cannabis Industry - The Trump administration is considering reclassifying cannabis from Schedule I to Schedule III, which could have significant implications for the industry, resulting in a +60% increase in Tilray's stock price [5] Economic Data Expectations - Upcoming economic data includes Case-Shiller Home Prices, Chicago Business Barometer, and Consumer Confidence, with expectations for slight increases and a narrowing in Consumer Confidence to 95.8 [6] - The Job Openings and Labor Turnover Survey (JOLTS) is expected to show a decrease in job openings to 7.1 million, the lowest since September 2024 [7] Company Earnings - Nike is set to report fiscal Q1 earnings, with expectations of a -60% year-over-year earnings decline and -4.95% revenue drop, despite having outperformed earnings expectations for eight consecutive quarters [8][9]

Group 1 - Cannabis stocks experienced a rally following President Donald Trump's apparent support for marijuana products aimed at senior citizen health care, leading to a 3% increase in IBD's specialty consumer products industry group, primarily composed of cannabis stocks [1] - The cannabis industry was the second-best performing group, following data-storage stocks, which were led by Western Digital [1] Group 2 - The ongoing legalization of recreational and medical marijuana across various states is prompting investors to track the best marijuana stocks available [2]

Group 1 - The cannabis industry, including multi-state operator Cresco Labs, is facing significant challenges such as black- and gray-market competition, limited access to financial services, and high taxation [1][2] - Cresco Labs' stock performance has been poor, with a $1,000 investment in the stock shrinking to approximately $200 over the past five years, while the S&P 500 index would have grown to $1,878 in the same period [2] - The legal status of cannabis in the U.S. is complicated, with federal illegality contrasted by varying state laws, leading to a patchwork of legalization across the country [4] Group 2 - There is ongoing lobbying for federal rescheduling of marijuana, but it is not a priority for lawmakers, leaving companies like Cresco in a survival mode [5] - Cresco Labs is experiencing declining revenue and ongoing challenges with profitability, although it has recently refinanced a $325 million credit facility and holds $147 million in cash and equivalents [6]

Core Insights - The prospects for marijuana legalization in the U.S. are facing setbacks due to opposition from influential legislators, negatively impacting cannabis stocks like Curaleaf [1][4] - President Trump is considering a measure to reschedule marijuana, which could lead to its de facto legalization at the federal level [2] - A group of nine Congress members, led by Congressman Pete Sessions, is actively opposing the rescheduling of marijuana, citing concerns over its impact on children and potential benefits to the marijuana industry [3][4] Industry Sentiment - The sentiment in the cannabis industry is currently negative, as evidenced by the decline in Curaleaf's stock price, which fell over 2% on a day when the S&P 500 only dropped 0.6% [1] - The ongoing debate and legislative pushback create uncertainty for cannabis operators, hindering their growth and access to financial services [4] Legislative Developments - The proposed rescheduling of marijuana by the DEA could eliminate its classification as a harmful drug, which is supported by public opinion but faces significant legislative opposition [2][3] - The letter sent to President Trump by Congress members highlights the political divide on marijuana legalization and the potential implications for the industry [3][4]

Core Insights - The potential rescheduling of cannabis from a Schedule I to a lower classification could lead to significant tax savings for marijuana producers [1][7] - Recent optimism in the cannabis industry is driven by renewed hopes for regulatory changes, particularly under President Trump's administration [2][5] - Rescheduling cannabis does not equate to legalization or decriminalization, and while it may facilitate research, it does not guarantee imminent legal changes [4][6] Industry Overview - Cannabis is currently classified as a Schedule I substance, which includes drugs with no accepted medical use and a high potential for abuse [4] - President Trump is considering rescheduling cannabis to Schedule III, which would align it with substances like testosterone and ketamine [5] - The process of rescheduling can be lengthy, as seen with previous attempts under former President Biden [5] Company Impact - The most immediate benefit of rescheduling could be a reduction in tax liabilities for cannabis companies, particularly through the elimination of section 280E, which restricts tax deductions for cannabis businesses [7][8] - Curaleaf Holdings estimates potential annual savings of approximately $150 million if rescheduling occurs, highlighting the financial impact on multi-state operators [9] - Despite being a leading cannabis operator, Curaleaf reported a revenue decline of 8% year-over-year, with a net loss of $114 million in the first half of the year [10] Stock Performance - Curaleaf's shares increased to over $3, marking the highest level since the previous year, driven by positive news regarding potential rescheduling [11] - Other cannabis stocks, such as Tilray Brands, also experienced significant gains, with Tilray's stock rising by over 58% in a short period [12] - However, rescheduling will not allow companies like Tilray to transport products into the U.S., indicating that excitement around legalization may be premature [13]

Group 1 - The movement towards marijuana legalization in the U.S. has gained momentum, positively impacting shares of multistate operators like Curaleaf, which saw a gain of over 10% [1] - President Trump is considering a federal proposal to reclassify marijuana as a less harmful drug, indicating potential changes in federal policy [2] - Republican Congressman Greg Steube has introduced the "Marijuana 1-to-3 Act," aiming to reschedule marijuana from Schedule 1 to Schedule 3, which would effectively legalize it within 60 days of passing [3] Group 2 - Steube has been a long-time advocate for marijuana reform, emphasizing that loosening restrictions would significantly expand research opportunities [4] - Public support for marijuana legalization has increased dramatically, with a Gallup survey indicating 68% support in 2024, up from 36% in 2005, reflecting a shift in societal attitudes towards the drug [4]

Regulatory Landscape - The industry is monitoring potential changes to marijuana classification under the Trump administration, specifically loosened restrictions [1] Market Outlook - The report suggests a focus on understanding the implications of potential federal policy changes on the marijuana industry [1]