Cannabis stocks rise on Tilray results, bullish view from Canaccord Genuity

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Shares of U.S. and Canadian cannabis companies traded higher on Thursday after Tilray (NASDAQ:TLRY [https://seekingalpha.com/symbol/TLRY]) reported better-than-expected revenue for Q1 FY26 and Canaccord Genuity issued a bullish view on the industry.

While Ontario-based Tilray (NASDAQ:TLRY [https://seekingalpha.com/symbol/TLRY]) posted its first revenue beat in over four quarters, boosting its shares by ~31% in early trading, its Canadian rivals, such as Canopy Growth (CGC [https://seekingalpha.com/symbol/CGC]), Aurora Cannabis (ACB [https://seekingalpha.com/symbol/ACB]), and SNDL Inc. (SNDL [https://seekingalpha.com/symbol/SNDL]), also traded higher. [https://seekingalpha.com/news/4502931-cannabis-stocks-gain-tilray-revenue-beat]

Additionally, Canaccord Genuity initiated coverage of a range of U.S. MSOs, including Curaleaf Holdings (OTCPK:CURLF [https://seekingalpha.com/symbol/CURLF]), Green Thumb Industries (OTCQX:GTBIF [https://seekingalpha.com/symbol/GTBIF]), and TerrAscend (OTCQX:TSNDF [https://seekingalpha.com/symbol/TSNDF]), with mostly bullish views, citing a potential rescheduling of cannabis in the U.S.

Its rating initiations came on Thursday, as a proposal to categorize marijuana as a less dangerous drug in Schedule III under the Controlled Substances Act (CSA) is currently undergoing review at the U.S. Drug Enforcement Administration (DEA).

However, analyst Kenric Tyghe pointed to uncertainty over the U.S. Internal Revenue Code 280E, which prohibits cannabis companies from deducting expenses when calculating gross income for tax purposes, as marijuana remains in Schedule I under the CSA.

If cannabis is moved to Schedule III, 280E won’t apply to marijuana firms, the analyst noted, arguing that risks related to Uncertain Tax Positions are exaggerated given “relatively recent precedents and legal opinions.”

“While we are mindful that the chatter and headlines around these UTPs makes for unsettling listening, we believe that stepping back and revisiting this issue is prudent, given the possible near-term rescheduling,” Tyghe wrote.

The analyst issued Buy ratings on Curaleaf Holdings (OTCPK:CURLF [https://seekingalpha.com/symbol/CURLF]), Green Thumb Industries (OTCQX:GTBIF [https://seekingalpha.com/symbol/GTBIF]), TerrAscend (OTCQX:TSNDF [https://seekingalpha.com/symbol/TSNDF]), and Verano Holdings (OTCQX:VRNOF [https://seekingalpha.com/symbol/VRNOF]), setting their 12-month price targets at C$5, C$18, C$2, and C$4 per share, respectively.

He issued a Hold rating and 12-month price target of C$0.35 on Planet 13 Holdings (OTCQX:PLNH [https://seekingalpha.com/symbol/PLNH]), recommending a “wait-and-see approach,” given headwinds such as a challenging tourism market in Las Vegas and underperforming retail operations in California and Illinois.

MORE ON CURALEAF HOLDINGS, GREEN THUMB, ETC.

* Green Thumb Industries Begins Receiving Revenues From Minnesota Cannabis Sales [https://seekingalpha.com/article/4828029-green-thumb-industries-begins-receiving-revenues-from-minnesota-cannabis-sales]
* Green Thumb: Strong Balance Sheet And Relative Downside Protection (Rating Upgrade) [https://seekingalpha.com/article/4827917-green-thumb-strong-balance-sheet-and-relative-downside-protection-rating-upgrade]
* Curaleaf Holdings Gains On Renewed Hope Of Cannabis Rescheduling In The U.S. [https://seekingalpha.com/article/4827528-curaleaf-holdings-gains-on-renewed-hope-of-cannabis-rescheduling]
* Cannabis stocks in focus as Tilray beats on Q1 revenue [https://seekingalpha.com/news/4502931-cannabis-stocks-gain-tilray-revenue-beat]
* Tilray Brands Q1 Earnings Preview: What to expect [https://seekingalpha.com/news/4502715-tilray-brands-q1-earnings-preview-what-to-expect]