Tilray Brands (TLRY) shares jumped nearly 20% on Monday, continuing a rally that has boosted cannabis producers by 28% over the last five trading sessions. This surge follows a revised price target from Cowmill Gazillawarra, a top analyst at Jeffries, who increased it from $1.50 to $2 while maintaining a buy rating. He suggested that this could enhance perceptions of the cannabis industry, noting that future regulatory changes would be crucial for shaping the sector’s prospects. The new target implies around a 44% upside from current prices.
Analysts view on Tilray
This analyst described efforts by Trump to reclassify cannabis from Schedule I to Schedule III as a “meaningful change” that could improve access, reduce taxes, and foster more research opportunities. He mentioned that Tilray stands to benefit significantly, given robust public support and ongoing discussions in Congress that could accelerate reform. Although this reclassification wouldn’t mean full legalization, it’s still seen as a transformative factor for producers like Tilray.
The optimistic outlook has led to a surge in trading activity for Tilray, with over 150 million shares changing hands on Monday—nearly triple the 50-day average. This also marked Tilray’s third straight day of profit as investors returned to the cannabis sector amid positive policy sentiments.
Potential policy shifts for cannabis
Recently, Trump indicated that a review of marijuana’s classification under US law is underway, with an expected decision in a couple of weeks. The proposed change aims to shift cannabis from Schedule I to Schedule III, a more lenient category that includes substances with recognized medical benefits and lower abuse risks.
Investors view this as a significant pivot for cannabis companies. The Schedule III designation would lower taxes, make research easier, and broaden commercial applicability. It could also draw in more institutional investors to the field.
Evaluating TLRY as an investment
Current sentiment on Wall Street reflects a moderate buy consensus for TLRY stocks, supported by two buy ratings and three holds over the last three months. The average price target stands at $1.03 per share, indicating a potential downside of roughly 30% from where TLRY is trading now.
