Important points
- Tilray Brands’ stock saw a decline on Friday, just before a 10-1 reverse stock split that will take effect after the market closes next Monday, December 1.
- A reverse stock split means the company will decrease the number of outstanding shares while increasing the price per share accordingly.
About six months ago, shareholders of Tilray Brands (TLRY) approved a 10-to-1 reverse stock split. Recently, as various cannabis companies have been announcing effective dates, stock prices have taken a significant hit.
On Friday, the stock dropped more than 20%, bringing its total loss for 2025 to nearly 40%.
Tilray Brands, which brands itself as a “global lifestyle and consumer packaged products company at the forefront of the global cannabis, beverage and wellness industry,” revealed late Wednesday that the reverse split will go into effect after the market closes next Monday, December 1. When trading resumes on Tuesday, the stock will be available on a split-adjusted basis under the same ticker symbol, but with a new CUSIP number 88688T209.
From Tuesday onward, every 10 shares of common stock will automatically be consolidated into one share, decreasing the total number of shares from roughly 1.16 billion to 116 million. Tilray clarified that no fractional shares will be issued.
Why is this important?
A reverse stock split reduces the number of shares available while proportionally raising the price per share. While this won’t change the overall value of Tilray investors’ holdings, it will lead to a higher price for individual stocks.
Tilray anticipates that the adjustments, which shareholders approved during a special meeting in June, will make the stock “more attractive to institutional shareholders” and minimize expenses related to annual meetings, potentially leading to savings of up to $1 million annually.
Nonetheless, investors often perceive reverse stock splits as a bearish indicator, reflecting a lack of confidence in the stock’s potential for growth. Although Tilray’s stock had surged nearly 60% earlier this year, following comments from President Donald Trump about marijuana reclassification, it has since declined due to ongoing regulatory uncertainty and the absence of conclusive rules.
