Is Tilray Brands (TLRY) Stock a Buy After a 200% Rally?

The recent 200% surge in Tilray Brands (TLRY) stock has sparked debate among investors about whether the rally reflects overvaluation or a justified response to transformative regulatory and market developments. With the U.S. cannabis sector at a pivotal inflection point, Tilray's strategic positioning in the post-rescheduling landscape and its aggressive U.S. market-entry plans warrant a closer look.

Regulatory Tailwinds: A New Era for U.S. Cannabis

The most significant catalyst for Tilray's recent performance is the December 2025 federal rescheduling of marijuana from Schedule I to Schedule III under President Trump's executive order according to the report. This shift, long advocated by the Biden administration and supported by the Department of Health and Human Services (HHS) and the Drug Enforcement Administration (DEA), acknowledges cannabis's medical utility while reducing bureaucratic hurdles for research and commercial operations as data shows. For Tilray, the rescheduling removes the tax burden under Section 280(e) of the federal tax code, which previously barred cannabis businesses from deducting normal operating expenses according to analysis.

The regulatory shift also opens the door for broader medical cannabis adoption. As stated by CEO Irwin D. Simon, the rescheduling aligns U.S. policy with scientific evidence, creating a "credible foundation for research and development". This is critical for Tilray, which has already demonstrated global leadership in medical cannabis, serving over 500,000 patients and offering 200+ registered products according to financial reports.

Strategic U.S. Market Entry: Tilray Medical USA

Tilray's formation of Tilray Medical USA, Inc. in December 2025 marks a calculated pivot toward the U.S. medical cannabis sector according to company announcements. The subsidiary leverages the company's international expertise, including its participation in 15+ clinical trials for conditions like PTSD, cancer-related nausea, and pediatric epilepsy according to industry analysis. By introducing medical-grade cannabis products tailored to U.S. regulatory guidelines, Tilray aims to capitalize on the growing demand for evidence-based therapies in states like Texas, Florida, and Virginia, which have expanded their medical programs in 2025 as reported.

The company's strategy extends beyond product development. Tilray plans to collaborate with healthcare operators and medical professionals to ensure compliance with emerging federal and state regulations according to market insights. This approach mirrors its success in international markets, where it has established partnerships with physicians and research institutions to standardize cannabis therapies according to industry reports.

Financial Resilience Amid Volatility

Despite a $793.5 million net loss in Q3 2025, Tilray's fiscal year 2025 results highlight resilience. The company reported $821 million in total revenue, a 4% year-over-year increase, with international cannabis revenue surging 71% in Q4 according to financial reports. Its balance sheet remains robust, with $256 million in cash and marketable securities and a net debt-to-EBITDA ratio of 0.3 times according to financial analysis. These metrics suggest Tilray is well-positioned to fund its U.S. expansion without overleveraging.

However, risks persist. The U.S. cannabis market remains fragmented, with state-level regulations creating operational complexity. Additionally, competition from hemp-derived CBD products and price compression in recreational markets could pressure margins as noted in market analysis.

Is TLRY a Buy? A Balanced Perspective

The 200% rally in TLRY stock reflects optimism about regulatory tailwinds and Tilray's strategic pivot to medical cannabis. However, investors must weigh the company's long-term potential against near-term challenges.

Key arguments in favor of a "buy" recommendation:
1. Regulatory Momentum: The Schedule III rescheduling reduces federal barriers, enabling Tilray to access banking services and deduct operating expenses according to policy analysis.
2. First-Mover Advantage: Tilray's global medical cannabis experience and clinical data give it a competitive edge in a newly regulated U.S. market according to industry reports.
3. Strong international revenue growth and a lean balance sheet provide flexibility for U.S. expansion according to financial statements.

Cautions:
- The U.S. market's regulatory and competitive landscape remains uncertain.
- Tilray's profitability hinges on successful execution of its medical cannabis strategy, which is untested in the U.S.

Conclusion

Tilray Brands' stock is a compelling case study in the intersection of regulatory change and corporate strategy. While the 200% rally may appear speculative, it is underpinned by tangible developments in U.S. cannabis policy and Tilray's proactive market-entry plans. For investors with a medium-term horizon and a tolerance for sector-specific risks, TLRY could offer asymmetric upside if the company successfully navigates the evolving regulatory and competitive landscape.