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The U.S. government’s decision to reschedule medical marijuana from Schedule I to Schedule III is being viewed as a milestone for the cannabis industry. For companies such as Tilray Brands, it is a positive development that recognizes medical uses for marijuana. However, rescheduling is not the same as legalization, and that distinction matters for investors considering U.S. expansion.
Rescheduling makes it easier to conduct research on marijuana in the U.S., but it does not open the door for Canadian producers to sell products across the border. Marijuana remains a controlled substance and is still federally illegal.
While medically licensed marijuana has been rescheduled, recreational products have not. Even if the industry appears to be moving toward broader reform, there is no indication in the available information that legalization is imminent or even on lawmakers’ radar.
Tilray Brands, a Canadian-based cannabis producer, has highlighted in a recent press release that it believes it is well positioned to take advantage of opportunities in a regulated U.S. medical marijuana market. The company described the rescheduling move as a defining inflection point.
Even so, the article emphasizes that a major expansion into the U.S. market is not something investors should assume will happen soon. It also notes that any broader reform would likely require substantial time to work through government processes.
The article points out that even if the Trump administration pursued legalization efforts or broader reform, the process itself could take years. It cites that in October 2022, then-President Joe Biden asked the U.S. Department of Health and Human Services and the Drug Enforcement Administration to review marijuana scheduling.
For years, cannabis investors have often relied on the expectation that U.S. legalization would arrive soon. According to the article, that strategy has not produced consistent results.
It notes that Tilray Brands’ stock last delivered a positive annual return in 2018, when it surged 215% following Canada’s legalization of marijuana. Since then, the stock has declined, described as an example of “buy the rumor, sell the news.”
The article concludes that Tilray’s investment outlook remains constrained by the lack of evidence that U.S. legalization is near. It characterizes legalization as the “big carrot” for investors, but says it is not on the horizon and could still be years away if it were to become possible.
As a result, it recommends a wait-and-see approach, arguing that Tilray is too risky to hold based on the information presented.
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