Tilray Brands, Inc. (TLRY): A Bear Case Theory

We came across a bearish thesis on Tilray Brands, Inc. on The Dutch Investors’s Substack. In this article, we will summarize the bulls’ thesis on TLRY. Tilray Brands, Inc.'s share was trading at $12.88 as of December 18th. TLRY’s trailing P/E was 57.50 according to Yahoo Finance.

Tilray Brands, Inc., a lifestyle consumer products company, engages in the research, cultivation, processing, and distribution of medical cannabis products in Canada, the United States, Europe, the Middle East, Africa, and internationally. TLRY once celebrated as a symbol of the cannabis boom. At its peak, TLRY traded near $150 per share, capturing the market’s imagination as a high-growth, trend-driven stock.

Since then, the company has experienced a dramatic collapse of roughly 99%, with its share price now around $1.30 and a market capitalization of approximately $1.5 billion. This stark decline underscores the risks of investing in businesses where hype outpaces fundamentals and serves as a cautionary tale for those chasing rapid growth without structural support.

Tilray’s challenges are emblematic of the broader cannabis sector, where companies are highly dependent on state and federal regulation, face rapidly shifting consumer preferences, and operate in markets with thin competitive moats. The sector is further complicated by a mix of legal and illegal competition, leaving individual companies with limited control over their growth trajectories. Political decisions, short-lived popularity cycles, and reliance on pricing as a primary differentiator combine to create a precarious operating environment. These factors make it difficult to generate sustainable long-term shareholder value or compound capital reliably.

While it is technically possible to profit from Tilray or other cannabis stocks, the inherent volatility, regulatory uncertainty, and structural weaknesses mean that such opportunities carry exceptionally high risk. Investors seeking consistent, durable returns are unlikely to find these qualities in TLRY, as the company’s fundamentals have repeatedly demonstrated the fragility of hype-driven growth. For those focused on long-term capital preservation and compounding, Tilray represents a cautionary example rather than an attractive investment, highlighting the dangers of chasing market fads in sectors where control over outcomes is limited and structural risks dominate.

Previously we covered a bullish thesis on Cronos Group Inc. by Jake LaMotta in February 2025, which highlighted its strong tangible asset base, growing revenues, and undervaluation relative to its net-net value. The company's stock price has appreciated approximately by 26.94% since our coverage. This is because the thesis partially played out. The thesis still stands as Cronos maintains financial strength. The Dutch Investor shares a similar view but emphasizes sectorwide challenges affecting Tilray.

Tilray Brands, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held TLRY at the end of the second quarter which was 14 in the previous quarter. While we acknowledge the potential of TLRY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.