Tilray stock price has continued to crash this year even as most shares have roared back. TLRY has crashed by 30% this year, making it one of the top laggards on Wall Street and in Canada, where it is also listed. Tilray Brands share price has collapsed by over 90% from its all-time high, mirroring the performance of other cannabis stocks. Its market cap has dropped to about $874 million, down from over $9.32 billion at its peak.
Cannabis stocks have plunged
The cannabis industry was once one of the hottest sectors in the financial market. This sector became highly popular after the US Supreme Court ruled that cannabis regulations were left to states.
Many American states have legalized medical marijuana. More countries, including Germany and Canada have also taken actions to legalize the product. As such, many investors believed that cannabis companies would thrive after the legalization.
That optimism helped to supercharge many cannabis stocks, including companies like Tilray, Curaleaf, Cronos, Truelieve, Green Thumb Industries, and Canopy Growth.
Most cannabis stocks have plunged over the years, shedding billions of dollars in value. This decline is largely because of the rising competition in the industry and the fact that the US has not passed a federal cannabis regulation.
Regulations have been highly fragmented, making it difficult for companies to do business in the US. Suggested bills aimed at the sector have all stalled, and with Republicans controlling the Senate and the House of Representatives, there are limited chances of success.
Tilray Brands is diversifying its business
The Tilray stock price has crashed even as the company has moved ahead to diversify its operations. It has done that by investing in the alcoholic beverages industry, a move that has given it entry into the United States.
The most recent numbers showed that Tilray Brands revenue rose by 9% to $211 million in its second quarter. Its beverage alcohol division made $63 million, while its cannabis revenue was $66 million. That is a sign that the beverage business will likely pass the cannabis segment in the coming months.
Tilray Brands distribution revenue rose to $68 million, while the wellness division made $15 million. Altogether, the firm anticipates that its annual revenue will be between $950 million and $1 billion, higher than the average analyst estimate of $947 million.
The Tilray stock price has crashed because the company is still losing substantial sums of money. Its net loss in the last quarter stood at over $85 million, and the six months to November to $119 million.
Analysts are optimistic about the Tilray Brands stock price will bounce back over time. The average TLRY stock price forecast is $1.82, a 93% surge from the current level.
Tilray stock price analysis
TLRY share price chart | Source: TradingView
The daily chart shows that the Tilray share price has crashed in the past few months. As a result, it has dropped below the 50-day moving average, a sign that bears are in control. The stock has plunged below the key support level at $1.15, the lowest swing on December 20.
The Percentage Price Oscillator (PPO) and the Relative Strength Index (RSI) have all pointed downwards. Therefore, the path of the least resistance for the TLRY stock price is bearish, with the next key level to watch being at $0.50.
However, there is a likelihood that the TLRY stock price will go through a strong comeback amid a short squeeze. If this happens, the next point to watch will be at $1.15.
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