Tilray Earnings Lead Cannabis Stocks After Trump Endorsement

Cannabis shares got a shot in the arm late last month after Trump touted the benefits for seniors in a Truth Social post, and Tilray Brands will be reporting earnings this week.

The Latest Developments

• President Trump posted a video to his social media platform highlighting the merits of cannabis use among seniors and advocating for CBD to be included in Medicaid.
• CBD stocks jumped amid rising hopes that marijuana will be rescheduled, allowing commercialisation in the US, potentially as soon as early next year.
• Tilray will report earnings, with profits slipping despite higher revenue as it faces integration costs from acquisitions.

Trump Boosts Cannabis Stocks

late in September after US President Donald Trump posted a video on his Truth Social platform endorsing cannabis use for seniors and for it to be covered by Medicaid. The video was produced by the Commonwealth Project, which advocates for the use of substances but isn't directly affiliated with the Administration. Trump is long known to be a supporter of decriminalising marijuana, having made comments to that effect during his campaign. His Health and Human Services Secretary, Robert Kennedy Jr, is also known to support the reclassification of cannabis. The video is taken as the latest sign that the administration is continuing to move towards some form of legalisation. The Biden administration requested that the Drug Enforcement Administration (DEA) study reclassifying marijuana to a lower risk level. Forty states allow the drug to be used for medical purposes, with reclassification at the federal level potentially coming early next year.

in the wake of Trump's post, rising over 40% in a single day, though shedding some of those gains in the days after. Still, it was a significant milestone for the company's exceptional performance this year. Back in August, its shares faced removal by Nasdaq after it fell below the minimum bid, and now the price has more than doubled since the start of the year. Investors are now turning their attention to the company's earnings to see if it has a chance of scoring new highs.

Tilray Focusing on International Growth

The company will report its fiscal first-quarter earnings before the open on October 9, with from -$0.01 a year ago. Revenues are expected to see a slight bump to $204.6 million from $200 million in the prior year. In its prior earnings release, the company reported international revenue growth of 71%, stating that it expected substantial growth in this segment. Analysts would expect the company to at least affirm its prior full-year guidance for EBITDA to grow between 13% and 31%, reaching $62-72 million. The company also explained the drop in revenue for its largest unit, beverages, as a result of rationalisation across recently acquired brands.

Tilray Eyes Higher Levels as Part of Wedge?

Tilray is forming an ascending broadening wedge pattern with the first key resistance at the round $2.00 handle and subsequently at $2.50 per share. If this pattern fully forms, $3.00 could be the next strong resistance. However, the RSI is close to overbought territory, so Tilray could form the third valley near $1.35 in a pullback fashion and bounce higher or correct deeper. If the wedge trendline fails to hold and the pattern has completed, a breakdown to $1.00 could ensue, followed by local lows around $0.50 and $0.30 if bearish pressure intensifies.

Source: SpreadEx | Tilray, daily