TLRY Plunges 7.5% as Trump's Cannabis Rescheduling Fails to Ignite Rally

Summary
• Tilray Brands (TLRY) tumbles 7.5% intraday to $11.41, erasing post-EO gains
• President Trump's Schedule III reclassification sparks sector optimism but misses investor expectations
• CEO Irwin Simon calls policy shift 'incremental' despite $23.2 52W high

TLRY's volatile 19 December session reflects cannabis sector's fragile momentum. After a 28% weekly surge fueled by Trump's marijuana rescheduling executive order, shares collapsed to a 52-week low of $11.00. The 7.5% drop underscores market skepticism about the policy's immediate impact on Tilray's U.S. expansion plans, despite CEO Simon's bullish statement. With turnover at 19M shares and a -1027 PE ratio, the stock faces critical technical levels ahead of the 26 December expiry cycle.

Policy Optimism Collides with Realistic Business Constraints
Tilray's 7.5% intraday selloff reflects a disconnect between regulatory progress and commercial reality. While Trump's Schedule III reclassification improved medical cannabis access, it falls short of the recreational legalization investors had priced in. The CEO's acknowledgment of 'incremental' progress—coupled with the company's $2.2B net loss in FY2025—has triggered profit-taking. Technical indicators show the stock trading below its 200-day MA of $1.41 and within a 11.00-12.16 range that suggests short-term bearish momentum. With 19M shares traded (16.59% turnover rate), the market is pricing in delayed U.S. market access and ongoing operational challenges.

Options Playbook: Capitalizing on Volatility with Precision
• RSI: 80.61 (overbought) • MACD: 2.88 (bullish) • 200-day MA: $1.41 (far below) • Bollinger Bands: 15.82 (upper), 6.49 (middle), -2.83 (lower)

Key levels to watch: 11.00 (support), 12.16 (resistance). With RSI at overbought territory and MACD above signal line, short-term volatility remains high. The 26 December expiry cycle offers strategic opportunities. Two top options:

• TLRY20251226P12 (Put):
- Strike: $12 | Expiry: 26 Dec | IV: 113.25% | Delta: -0.589 | Theta: -0.0061 | Gamma: 0.204 | Turnover: 110,374
- High IV suggests strong bearish sentiment; moderate delta balances risk/reward. Projected 5% downside (ST=10.84) yields $1.16 payoff.

• TLRY20251226C12 (Call):
- Strike: $12 | Expiry: 26 Dec | IV: 117.02% | Delta: 0.416 | Theta: -0.0697 | Gamma: 0.198 | Turnover: 102,410
- High gamma ensures sensitivity to price swings; 117% IV reflects market uncertainty. 5% upside (ST=11.98) yields $0.98 payoff.

Aggressive bulls may consider TLRY20251226C12 into a bounce above $12.16. Cautious bears should target TLRY20251226P12 if support at $11.00 holds.

Backtest Tilray Brands Stock Performance
The backtest of TLRY's performance after a -8% intraday plunge from 2022 to now shows mixed results. While the 3-Day and 10-Day win rates are above 40%, the 30-Day win rate is slightly lower at 39.4%. The maximum return during the backtest period was 0.85%, indicating that while there were some positive returns, they were relatively modest.

TLRY at Crossroads: Policy Optimism vs. Operational Realities
Tilray's 7.5% drop highlights the precarious balance between regulatory progress and commercial execution. While the 113% implied volatility in options suggests market anticipation of further swings, the -1027 PE ratio underscores fundamental challenges. Investors should monitor the 11.00 support level and 12.16 resistance ahead of expiry. Sector leader Johnson & Johnson (JNJ) rose 0.02% today, offering a contrast to TLRY's struggles. For those with a short-term view, the 26 December options cycle presents high-gamma opportunities. Watch for a breakdown below $11.00 or a regulatory catalyst to reignite momentum.