What Happened?
Shares of cannabis company Tilray Brands (NASDAQ: TLRY) fell 4.6% in the morning session after reports revealed Department of Justice canceled pending cannabis rules. This regulatory setback adds to a host of challenges for the cannabis producer. The company is already under pressure to meet Nasdaq's listing standards, which require a minimum share price that Tilray has struggled to maintain. To address this, the company has been exploring options like a reverse stock split. Compounding these issues, Tilray reported a significant net income loss of approximately $1.27 billion for the quarter ended May 31, 2025, highlighting its difficult financial position in a competitive market.
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What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 71 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 21 hours ago when the stock dropped 5% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
Tilray is down 28.1% since the beginning of the year, and at $1.05 per share, it is trading 42% below its 52-week high of $1.81 from September 2024.
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