Tilray Brands Expanded Its Ventures into Alcoholic Beverages, but is the Shares Worthier Investment compared to Half a Decade Ago?
In the past five years, investing in cannabis stocks hasn't been kind to investors. One of the most notable names in the industry is Tilray Brands (TLRY), which has seen its value plummet by an alarming 94%.
Despite the downturn, Tilray has been diligently working to break into the U.S. marijuana market. However, without national legalization, progress has been slow. Instead, the company has turned to other solutions, such as buying a variety of alcohol brands. This strategic move has helped Tilray expand its U.S. presence and boost sales. If marijuana legalization ever happens, Tilray could potentially leverage its existing operations for a significant advantage.
The key question is, has Tilray improved its position? Is the stock now a better bet than it was five years ago, making it an attractive choice for contrarian investors now?
Tilray's Fundamentals Are Still a Concern
One major issue many cannabis producers, including Tilray, have faced is a lack of profitability and excessive cash burn. This often leads to frequent share offerings and equity dilution, which can further harm an already struggling stock.
In its latest quarterly report, Tilray showed growth, but its financials still remained problematic. Operating losses increased to $42.2 million, worse than the previous year's $41.8 million. Meanwhile, its cash burn for the past six months was a staggering $76 million. This is a significant increase from the $46.3 million reported during the same period the previous year.
Moreover, Tilray removed some slow-growing stock-keeping units (SKUs) from its beverage segment, indicating potential bloat. While Tilray has been eager to make a name for itself in the U.S. craft beer scene, it's come at the cost of acquiring not-so-strong brands. This could mean the company is still prioritizing growth over strategic and financially sound decisions.
A Less Optimistic Future for Tilray
Five years ago, there was hope and optimism surrounding marijuana legalization, especially following the Democratic Party's election win in 2020. However, despite the Democrats controlling the House and Senate, they were unable to pass significant legislation that would benefit the cannabis industry.
With a new Republican-led government, optimism regarding legalization has significantly dropped. The AdvisorShares Pure US Cannabis ETF, for instance, has fallen by 50% in the past three months. Tilray's alcohol business may provide some revenue growth, but it still looks far from being profitable or a worthy investment.
Tilray: A High-Risk Stock to Own
Investors might be tempted by Tilray's cheapened valuation. However, just because the price has plummeted doesn't guarantee that the stock can't continue to fall or that the company can survive the long term. Without much hope for the U.S. marijuana market to open up anytime soon, it can be difficult to find reasons to remain hopeful for Tilray's future.
Tilray may be more diverse than it was five years ago, but it hasn't proven to be a better investment now. For most investors, there are far better growth stock options available.
[1] Securities and Exchange Commission (SEC) Filing, Form 10-Q, Tilray Brands Inc., Q2 2025[2] Earnings Report, Tilray Brands Inc., Q2 2025[3] Marijuana Business Daily[4] Tilray Investor Presentation, Q2 2025
Despite Tilray's efforts to diversify its business with alcohol acquisitions, the company continues to struggle financially. Operating losses have increased, and cash burn continues to be a concern, leading to frequent share offerings and equity dilution. (Tilray's Fundamentals Are Still a Concern)
If you're considering investing in Tilray, it's important to understand the high risk associated with the stock. The company's primary business, cannabis, remains uncertain due to regulatory issues and slow market growth, and its diversification into alcohol may not provide sufficient profitability. (Tilray: A High-Risk Stock to Own)
