Tilray Stock's High Is Fading — Cannabis Bulls Aren't Buzzing Over The Beer Pivot

• BrewDog, now owned by Tilray, announced a 12-month partnership covering major U.K. festivals.
• Tilray has recently rolled out several beverage-focused announcements, including new ready-to-drink products from 10 Barrel Brewing.
• Investor frustration comes despite improving U.S. cannabis policy momentum after marijuana was moved from Schedule I to Schedule III for regulated medical use last month.

Shares of Tilray Brands, Inc. (TLRY) slid to an over nine-month low on Tuesday after another beer-focused announcement fueled retail concerns that the company is becoming more of a brewery than a cannabis player.

TLRY stock fell 4% on Tuesday to $5.69, logging its third straight session of losses. It is also the second-worst performer so far this year among major cannabis stocks, with shares down 37%. 

Beer Buzz, Cannabis Blues

The latest pressure came after BrewDog, now owned by Tilray, announced a 12-month partnership with Underbelly covering major U.K. festivals and venues, including the Edinburgh Fringe Festival, London’s Underbelly Boulevard Soho and holiday events in Trafalgar Square and Leicester Square.

The announcement added to a string of beverage-focused headlines from Tilray over the past few weeks. Earlier this month, Tilray-owned 10 Barrel Brewing launched new ready-to-drink beverages called “Clean Slate” and “Salty Sips,” while SweetWater Brewing unveiled a new “Livin’ Salty” lager collaboration with Salt Life.

The flow of brewery, beer and beverage announcements has frustrated cannabis-focused investors, particularly after the U.S. government moved marijuana from Schedule I to Schedule III for regulated medical use last month. The policy change was widely viewed as one of the most important federal cannabis reforms in decades and sparked optimism across pot stocks.

Tilray's US Pot Push Still On Hold

After the U.S. rescheduling announcement, Tilray aggressively positioned itself as a major player in the cannabis market. CEO Irwin Simon said at the time that “federal policy is finally aligning with science, medicine, and most importantly, patient needs,” while calling the policy change a “defining inflection point” for medical cannabis in the U.S.

In a later Bloomberg interview, Simon said Tilray was “one of the largest cannabis companies in the world” with over 7 million square feet of cultivation capacity and cannabis operations spanning more than 21 countries.

However, Simon also acknowledged that Tilray currently has no U.S. cannabis operations involving THC, the compound in marijuana responsible for the “high” associated with cannabis use. “Tilray today cannot sell any cannabis in the U.S.,” he said, adding that the company instead chose “a different fork in the road” by expanding into beer, beverages and wellness businesses while waiting for federal cannabis reform.

Simon said Tilray has already developed the “playbook,” genetics and medical research to move quickly into the U.S. cannabis market if regulations advance further. “Could we be in a business within six months? Absolutely, if we get the right approvals,” he said.

Tilray Says It’s ‘Not A Little Craft Brewer’

Tilray’s beverage focus accelerated after the company completed its acquisition of key BrewDog assets in March, including the global brand, U.K. brewing operations, and brewpub portfolio. Tilray said the deal would help build a global beverage platform generating $500 million in annual revenue.

During the company’s most recent earnings call, Simon stressed the importance of BrewDog and the broader beverage business. “I've done over 100 acquisitions in my life, and I've never received more calls, congratulations, and a brand with more awareness on a global basis, which helps Tilray to be at the forefront around the world,” Simon said while discussing BrewDog.

He also said Tilray is “not just a little craft brewer anymore” as the company scales toward nearly 18 million beer cases globally. The company said that, after the BrewDog transaction, Tilray is now the fourth-largest craft brewer in the U.S. and the top craft brewer in the U.K. Simon said Tilray is evolving into a “global lifestyle consumer products company” spanning beverages, cannabis and wellness products across over 20 countries.

How Do Retail Traders Feel About TLRY?

On Stocktwits, retail sentiment for TLRY hovered around record low levels (21/100) at ‘extremely bullish’ levels amid nearly a 600% surge in 24-hour message volumes.

One user said TLRY “completely missed to prepare for US rescheduling opportunities - no US licensed assets, no net cash. Mostly dilution and lawsuits.” 

Another user said, “PR your Cannabis plans, stop with the beverage PR’s,” while a separate trader said, “ individuals are holding a stock that was marketed as a 'Quantum Leap' for cannabis but has settled into being a German Pill Distributor that owns a Mid-Tier Craft Brewery conglomerate.”

TLRY stock has risen 29% over the past year. 

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