Cannabis Stocks Blaze Higher as Tilray Proves Profits Matter Most When The Initial Hype Passes
AI stocks, take note — the cannabis sector just staged a rare comeback. After losing ~70% of its value since 2021’s peak amid oversupply and stalled federal reforms, Tilray BrandsTLRY defied the gloom by posting its first quarterly profit and beating revenue estimates — sending shares up nearly 20% and dragging the entire sector along for the ride.
Profits matter, shocking: Tilray swung from a $34.7M loss to $1.5M in net income for Q1 fiscal 2026, while revenue climbed to a record $209.5M. The Canadian cannabis company’s turnaround comes as the broader industry hemorrhages cash, with leading operators now worth less than $11B combined — down from $37B at their 2021 peak. Profits are rare in the industry, especially as retail and wholesale prices keep falling.
- Average US retail cannabis prices have dropped 32% since 2021, while Colorado’s wholesale flower prices just hit a record low of $649 per pound — down from over $1.7K in 2021.
- The industry’s drowning in $3.8B of overdue payments, with invoices ~1.6 months late — and Michigan just tightened the noose with a 24% wholesale tax, pushing total taxes near 40%.
Political Winds Lift All Boats. Losses Could Burn Some.
The sector got a recent jolt when President Trump shared a video promoting Medicare coverage for hemp-derived CBD, triggering a massive rally that saw some cannabis stocks surge over 50% in a single session. Adam Stettner, CEO of cannabis-finance firm FundCanna, called Trump’s move “historic,” noting that “no sitting president has ever publicly pushed for Medicare to cover cannabinoids.” That helped push the Amplify Alternative Harvest ETF up nearly 40% this year, with most of the gains coming in the past three months.
- Industry expert Seth Yakatan sees potential upside of 50-100% in many cannabis names if federal rescheduling moves cannabis from Schedule I to Schedule III.
- This would eliminate the crushing weight of IRS Code 280E — helping cannabis businesses lower their tax burdens, access banking and capital more easily, and reduce operational risks.
Survival of the disciplined: Not all cannabis stocks are built the same, and while most operators remain trapped by debt and regulatory uncertainty, companies like Tilray are proving that disciplined execution can generate profits even in this brutal environment. According to Cannabis Ventures, TrulieveTCNNF, Green Thumb IndustriesGTBIF, and Verano HoldingsVRNOF have some of the highest adjusted operating incomes amongst cannabis names. While the cannabis shakeout is far from over, those who’ve mastered their fundamentals may have positioned themselves best when the sector eventually stabilizes.