Cannabis Stocks Rally on Tilray Earnings, Rescheduling Hopes
Tilray's record revenue and renewed optimism for the DEA's Schedule III review are fueling broad-based gains across the cannabis sector.
The cannabis sector is experiencing a significant rally, with investors buoyed by strong earnings from industry giant Tilray Brands (TLRY) and renewed optimism for favorable policy changes in the United States. Tilray's stock surged over 22% following the announcement of its first-quarter fiscal 2026 results, which saw the company post a surprise profit and record revenue. The positive sentiment has lifted other major cannabis stocks, with Canopy Growth (CGC) climbing approximately 8% and SNDL Inc. (SNDL) gaining around 7%.
Tilray's impressive financial performance was a key catalyst for the sector-wide rally. The company reported a , a significant turnaround from a net loss in the prior-year quarter. This strong showing has injected a fresh wave of confidence into a sector that has faced numerous headwinds.
Adding to the bullish sentiment is the ongoing review by the U.S. Drug Enforcement Administration (DEA) to reclassify cannabis from a Schedule I to a Schedule III controlled substance. While the process has faced delays, the potential benefits of such a move are substantial. , but it would end the restrictive Internal Revenue Code Section 280E, allowing state-compliant cannabis businesses to deduct ordinary business expenses for the first time. This change is expected to provide significant tax relief and improve the financial health of the industry.
While the path to rescheduling remains uncertain, the combination of strong corporate earnings and the prospect of meaningful policy reform has created a powerful tailwind for cannabis stocks. Investors will be closely watching for further developments from the DEA and continued signs of financial strength from key players in the sector. The than it has in recent months, but the journey is likely to remain volatile.