Tilray's 3.32% Rally and 31.36% Volume Spike to 350th as U.S. Cannabis Reclassification Hopes Build

Tilray Brands (NASDAQ:TLRY) saw a 3.32% rise on August 12, 2025, with a trading volume of $0.30 billion, up 31.36% from the previous day, ranking 350th in market activity. The move followed renewed optimism about potential U.S. regulatory changes, as President Trump’s administration reportedly considers reclassifying cannabis to Schedule III, a shift that could ease federal restrictions and unlock banking access for cannabis firms.

Analysts highlight that a Schedule III reclassification could remove tax burdens under Section 280E of the IRS code, allowing cannabis companies to deduct standard business expenses. This regulatory shift is seen as a critical catalyst for the sector, potentially attracting institutional investment and accelerating market expansion. Tilray’s CEO, Irwin D. Simon, recently purchased 165,000 shares at $0.61, signaling confidence in the company’s long-term prospects. Institutional investors have also increased stakes, including Lido Advisors LLC and JPMorgan Chase & Co.

Despite these positives, Tilray faces operational challenges. The company reported a 1.4% revenue decline in its latest quarter and struggles with profitability, marked by a -12.8% operating margin and a -114.4% net income margin. While its revenue growth of 11.2% over the past year outpaces the S&P 500, concerns persist over cash burn and market concentration risks, particularly in Canada. Analysts caution that political uncertainty and state-level regulatory disparities could limit growth opportunities.

A backtested trading strategy involving the top 500 stocks by daily volume from 2022 to 2025 yielded a $2,300 profit. However, the approach experienced a maximum drawdown of -15.7% in early 2023, underscoring the volatility inherent in high-beta assets like Tilray. The stock’s beta of 1.85 reflects its sensitivity to broader market movements, a factor investors must weigh against potential regulatory-driven gains.