TLRY Plummets 5.1% Amid Cannabis Sector Volatility: What's Brewing in the Green Rush?

Summary
• Tilray Brands (TLRY) plunges 5.09% to $9.63, hitting a 52-week low of $9.57
• Canopy Growth (CGC) leads cannabis sector with -6.11% decline
• Amplify Alternative Harvest ETF (MJ) drops 1.63% as sector-wide jitters persist
• Options chain shows surging put buying at $9.5 strike ahead of January expiration

Tilray Brands faces a sharp intraday selloff amid a broader cannabis sector correction. With the stock trading near its 52-week low and a -867.6x P/E ratio, the move reflects growing concerns over regulatory headwinds and Trump's looming tariff threats. The sector's mixed performance—driven by CGC's -6.11% drop—highlights the fragility of cannabis stocks in a post-rescheduling environment.

Cannabis Rescheduling Hopes Fade as Trump Tariff Threats Emerge
The sharp decline in TLRY follows President Trump's warning to escalate pharmaceutical tariffs to 250% within 18 months, per Pharmaletter. This threatens cannabis companies' access to critical APIs and research funding. Options data reveals a 74.78% implied volatility ratio at the $9.5 put, indicating aggressive bearish positioning. The stock's -5.09% drop aligns with sector-wide jitters as investors reassess the long-term viability of cannabis research funding and banking access post-rescheduling.

Cannabis Sector Mixed as CGC Leads Downward Spiral
Tilray's -5.09% decline mirrors broader cannabis sector weakness, with sector leader Canopy Growth (CGC) falling -6.11%. The Amplify Alternative Harvest ETF (MJ) lags at -1.63%, while the AdvisorShares Pure Cannabis ETF (YOLO) rallies 1.48%. This divergence reflects divergent investor sentiment between traditional growers (TLRY/CGC) and ancillary tech plays (YOLO). The sector's -3.78% turnover rate suggests liquidity constraints amid heightened volatility.

Bearish Options Playbook: Puts at $9.5 Strike Show Strong Theta/Gamma Profile
• 200-day average: $1.61 (far below current $9.63)
• RSI: 60.88 (neutral territory)
• MACD: 2.29 (bullish) vs. 2.38 signal line (bearish crossover forming)
• Bollinger Bands: $0.71 (lower) to $16.13 (upper) – current price near 12% of range

Key technical levels: 30D MA at $5.96 (bearish divergence), 200D MA at $1.61 (critical support). The stock faces immediate resistance at $10.11 (intraday high) and support at $9.57 (52W low). With 3.78% turnover and -5.09% price action, short-term bearish momentum is intact. The Amplify Alternative Harvest ETF (MJ) at -1.63% offers sector exposure but lacks leverage.

Top Options:
• TLRY20260102P9.5
- Put option, strike $9.50, expires 2026-01-02
- IV: 76.19% (high volatility)
- LVR: 26.78% (moderate leverage)
- Delta: -0.423 (sensitive to price moves)
- Theta: -0.0036 (slow time decay)
- Gamma: 0.360 (high sensitivity to price changes)
- Turnover: 8,431 (liquid)
- Payoff: $0.03/share if price drops to $9.15 (5% downside)
- This put offers optimal risk/reward with high gamma and moderate leverage for a 5% bearish move

• TLRY20260102P9
- Put option, strike $9.00, expires 2026-01-02
- IV: 75.72% (high volatility)
- LVR: 56.71% (strong leverage)
- Delta: -0.249 (moderate sensitivity)
- Theta: -0.0081 (moderate time decay)
- Gamma: 0.294 (good sensitivity)
- Turnover: 15,853 (high liquidity)
- Payoff: $0.63/share if price drops to $9.15 (5% downside)
- This put provides maximum leverage with 56.71% potential return on a 5% move, ideal for aggressive short-term bearish bets

Action: Short-term bears should prioritize the $9.50 put for its high gamma and moderate leverage. If $9.50 breaks, consider rolling into the $9.00 put for amplified exposure.

Backtest Tilray Brands Stock Performance
The backtest of TLRY's performance after a -5% intraday plunge from 2022 to now shows mixed results. While the 3-day win rate is 43.53%, the 10-day win rate is 40.00%, and the 30-day win rate is 38.82%, indicating a higher probability of short-term gains, the overall return is relatively modest, with a maximum return of only 2.11% over 30 days. This suggests that while TLRY has a good chance of recovering from a significant drop in the short term, long-term gains are more modest.

TLRY Faces Critical Support Test: Watch for $9.50 Breakdown
Tilray's -5.09% drop signals growing bearish conviction as Trump's tariff threats overshadow cannabis rescheduling optimism. The stock's 52-week low test at $9.57 and -867.6x P/E ratio highlight structural weaknesses. Sector leader Canopy Growth (CGC) at -6.11% reinforces the bearish narrative. Investors should monitor the $9.50 support level—breakdown here could trigger a 20% correction. Aggressive short-sellers should target the $9.50 put (TLRY20260102P9.5) for 26.78% potential returns. Watch for Trump's tariff timeline and January 8 earnings report for catalysts.