This Stock Has Doubled in the Past 6 Months: Is It Too Late to Buy?
Key Points
-
Tilray Brands’ shares are gaining ground on the possibility of cannabis legalization in the U.S.
-
However, similar developments didn’t lead to much success for the company in Canada.
-
Tilray Brands still faces too many unknowns, and the stock remains too risky for now.
Is this the year Tilray Brands (NASDAQ: TLRY) finally starts its comeback? During the past five years, the company has lagged broader equities as the cannabis industry, where it is a leader, continues to fall far short of expectations. However, Tilray Brands has been on fire this year, and during the past six months alone, the stock is up more than 150% (as of Oct. 2). Yet, the shares are still well into penny stock territory and are currently trading for about $1.65 apiece.
If Tilray can maintain the momentum of this year through the end of the decade, those who miss out on this opportunity to invest in the stock might regret it in the future. Let’s see whether there is more upside ahead for Tilray Brands.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
Why is Tilray Brands performing well this year?
Tilray’s business spans several industries, including medical and recreational cannabis, the purchase and resale of pharmaceutical products, hemp-based wellness products, and the company’s craft brewing operations. Tilray also operates in many countries, including Canada (where it is based), the U.S., Germany, and others. The company’s biggest opportunities, however, might lie in the U.S., especially if cannabis is legalized at the federal level, which it hopes will be the case.
During the past six months, Tilray’s shares have soared precisely because of optimism regarding U.S. marijuana legalization. The latest signs of potential developments came directly from the White House. In August, President Donald Trump said that his administration was considering rescheduling cannabis from a Schedule 1 substance (the most dangerous category) to a Schedule 3 (substances with medical uses, but with risks). While that is short of full-blown legalization, it might still move the needle for the industry.
And more recently, Trump posted a video on social media that promoted the alleged health benefits of CBD for seniors. Wall Street is very excited about these developments, and Tilray’s shares jumped on this news.
We have seen (a version of) this movie before
Recreational use of cannabis has been legal in Canada since late 2018. Shares of leading pot companies in the country soared as a result of that milestone, as investors rushed to profit from what they thought would be a huge and ever-growing market. Things didn’t turn out that way, however. Even though cannabis was legalized in Canada, the market opportunity has not been what many expected.
First, the market was saturated. There were too many companies vying for market share. This competition created a supply glut. Second, even though cannabis was permitted, it remained under stringent regulatory oversight. The process to obtain the proper licenses to operate and sell cannabis slowed the progress of the market. Third, old habits die hard. Many people who had been buying cannabis illegally for a long time continued to do so, even though it became legal.
The illicit market has shrunk significantly, though. According to one study, medical cannabis sales accounted for 11.8% of the market before legalization, with illicit channels grabbing 88.2%. As of 2023, illegal sales had dropped to 24.3%, a significant decline, but that still means that about a quarter of every dollar spent on cannabis in the country is from an illegal transaction.
That’s still a meaningful amount. All these challenges have weighed on Tilray and its peers in the industry. Tilray has generated inconsistent (at best) financial results due to these and other headwinds. That’s why the company has lost most of its market value during the past seven years.
Exercise extreme caution
Of course, if the U.S. does legalize cannabis at the federal level, things might go differently for Tilray. But that will largely depend on the details of this still hypothetical development. Will retailers need to obtain proper licenses? What will that process look like? Will there be special taxes for sales of cannabis products — similar to those on alcohol and tobacco — at the federal level?
These (and other) factors will affect the market opportunity. And just as in Canada, Tilray may have to contend with stiff competition, perhaps from larger companies that have significant experience in navigating markets for highly regulated products, such as tobacco and alcohol.
And while we continue to speculate, there is still no guarantee that Trump’s administration will actually legalize cannabis. That’s why Tilray remains a speculative play at this point. Investors should avoid the stock.
Should you invest $1,000 in Tilray Brands right now?
Before you buy stock in Tilray Brands, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tilray Brands wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $631,456!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,147,755!*
Now, it’s worth noting Stock Advisor’s total average return is 1,063% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of September 29, 2025
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.