Cannabis provider Tilray stock has sunk 40% over the past 30 days. Is now the time to buy?

Shares of Tilray (NASDAQ:TLRY) have lost 40% of their value over the past 30 days, despite recent signs of progress towards the federal legalization of cannabis in the US. Is now a good time to buy?

Weed stocks have been volatile for months, bobbing up and down with the news flow on Congressional efforts to legalize the drug on the federal level. While the product has been legalized in many states for medical and/or recreational use, it is still classified as a controlled substance by the US Drug Enforcement Agency.

Tilray’s stock has slid largely in tandem with its peers lately. As of April 28, shares of Canopy Growth (CGC) had plunged 37% over the previous 30 days. Meanwhile, Sundial Growers (SNDL) retreated 38%, Aurora Cannabis (ACB) fell 32% and Cronos Group (CRON) declined 29%. Curaleaf (OTCPK:CURLF) has performed the best, sliding only 9%.

Despite the overall downward trend, Tilray shares got a boost on April 6 after the company released its Q3 earnings report. Although revenue fell short of analyst estimates, management said the company was on track to achieve revenue of $4B by the end of fiscal 2024.

Analysts, however, were not as enthusiastic.

In a note dated April 7, the day after the earnings report, Benchmark Company analysts noted that competition from illegal cannabis sales remained a “systemic issue that could be hard to remedy.”

“We are optimistic on global cannabis growth from ongoing legalization that should open huge markets including Germany, but are cautious TLRY can accomplish their aspirational FY24 global revenue guidance,” they said, rating the stock a Hold.

During an interview with CNBC on April 20, Tilray Chief Executive Officer Irwin Simon said he sees Tilray with U.S. sales of $1.5B after cannabis is legalized on the federal level.

Simon also said that once cannabis is legalized in the U.S., the company could look to merge or acquire another company. He added that until the SAFE Banking Act is passed, legislation that would allow cannabis company to fully participate in the U.S. banking system, institutional investors would not be allowed to invest in weed companies.

The SAFE Banking Act was passed by the U.S. House in February as an amendment to the America COMPETES Act. The legislation is currently awaiting action by the U.S. Senate.

Cannabis stocks also rallied on March 25 amid news that the US House was readying a vote on whether to pass a marijuana legalization bill called the MORE Act. An earlier version of the bill had been passed in 2020, but stalled in the US Senate. The bill was finally passed on April 1 and has moved to the Senate.

The stocks rose again around April 11 when New Jersey regulators announced that they would allow the sale of marijuana for recreational use through several of the state’s medical marijuana dispensaries and alternative treatment centers.

Wall Street analysts, on average, rate Tilray a Hold. As of April 28, 14 ranked Tilray a Hold, four a Strong Buy and two a Sell. SA authors also rated the stock a hold.

For a more in-depth look at Tilray, check out SA contributor Juxtaposed Ideas’ “Trulieve vs. Tilray: Legalization May Not Be a Game Changer After All” or SA contributor JR Research’s “Is Tilray Stock a Buy, Hold or Sell After Earnings?.”