TLDR
- Tilray (TLRY) stock rose 14.2% Wednesday following reports the Trump administration plans to reclassify cannabis
- According to Axios, an administration official indicated the rescheduling could occur as early as Wednesday
- The change would shift cannabis from Schedule I to Schedule III — placing it alongside substances like Tylenol with codeine
- Competitor Canopy Growth (CGC) climbed 21.1%, Curaleaf (CURLF) jumped 26.3%, and the MSOS ETF advanced 19.4%
- The rescheduling would maintain federal prohibition while potentially enabling banking services and expanding medical research
Tilray stock had been building momentum throughout the week, reaching a peak of $8 — representing more than a 30% increase from its yearly low — when Wednesday’s announcement provided additional upward momentum.
The driving force behind the rally came from an Axios report referencing a White House official who revealed the Trump administration’s plans to reclassify cannabis as a Schedule III controlled substance. According to the report, implementation could happen as early as Wednesday.
Cannabis currently sits in the Schedule I category, placed alongside substances like heroin and LSD. Moving to Schedule III would position it with medications such as Tylenol with codeine — representing a significant downgrade in federal restriction level.
This development stems from an executive order President Trump signed last December, instructing the attorney general to expedite the rescheduling process and broaden medical research opportunities for cannabis. The original order contained no specific implementation timeline.
The Axios report attached urgency to the matter. Market participants reacted swiftly.
Tilray (TLRY) closed Wednesday’s session with a 14.2% gain. Trading volume exceeded 28 million shares, dramatically higher than the 30-day daily average of 2.8 million. Activity levels increased tenfold.
Canopy Growth (CGC) posted a 21.1% gain. Curaleaf (CURLF) — operating primarily in US markets — jumped 26.3%. The AdvisorShares Pure US Cannabis ETF (MSOS) rose 19.4% to $5.11, despite remaining well below its February 2021 closing record of $55.05.
The Justice Department declined to comment on the Axios report.
Understanding the Practical Impact of Reclassification
Rescheduling cannabis would maintain federal prohibition. The change would, however, create meaningful practical differences.
Banking access represents one of the most significant challenges facing cannabis businesses. The federal illegal status currently prevents many financial institutions from serving cannabis companies. Reclassification could reduce these barriers.
The change would also enable expanded medical research opportunities, which Schedule I classification has severely restricted.
For Tilray, the development carries significance despite the company’s absence from US cannabis markets. Management has publicly stated the company remains on the sidelines, waiting for improved regulatory conditions before entering the American market.
Tilray’s Latest Financial Results
Tilray’s latest quarterly report revealed cannabis revenue growth of 19% to $64.8 million, powered by international expansion, strategic acquisitions, and dominant positioning in the Canadian market.
The company has been developing its alcoholic beverages division as an additional revenue channel. Recent acquisitions include Brewdog, recognized as the UK’s largest craft beer brand, along with a strategic partnership arrangement with Carlsberg.
Beverage segment revenue reached $43 million last quarter — a decline from the $56 million recorded in the comparable year-ago period.
Regarding bottom-line performance, net loss decreased 97% to approximately $2.4 million. The company’s “Project 420” cost-reduction program aims to accelerate the path toward sustained profitability.
Tilray and fellow Canadian cannabis producers have accumulated billions in losses throughout much of the past decade, following aggressive expansion strategies after Canada implemented recreational legalization in 2018.
Wednesday’s 14.2% single-session advance marked the stock’s strongest daily performance in recent months, with elevated volume levels confirming substantial market interest in the reclassification report.
