We recently published a list of 7 Best CBD Stocks To Invest In Right Now. In this article, we are going to take a look at where Tilray Brands, Inc. (NASDAQ:TLRY) stands against other best CBD stocks to invest in right now.
An essential component of medical marijuana, CBD is the legal, non-psychoactive compound that is used to treat chronic pain, anxiety, and other ailments. Though initially met with skepticism, medical cannabis is rapidly gaining traction in the United States and as of the writing of this article, the use of marijuana for medical purposes is legal in 39 states, in addition to the District of Columbia. The latest state to join the growing list was Nebraska, which voted to legalize and regulate medical cannabis in November 2024.
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Despite the growth, 2024 was overall a very turbulent year for the American cannabis sector. The decriminalization process is going slower than expected and legalization ballot measures in Florida, and South and North Dakota failed to pass. Wholesale prices are also at record lows and despite all the efforts, the legal industry still faces stiff competition from the unregulated black market. As a result, the American Cannabis Operator Index, which tracks the market value of firms in the industry, has fallen by over 50% since a year ago, and more than 90% since its peak in April 2019. A recent survey by Whitney Economics revealed that only 27.3% of cannabis operators nationwide are profitable. According to the US Chamber of Commerce, 65.3% of all small businesses in the US are profitable, so the cannabis sector is trailing far behind the national average.
A recent encouraging development came when President-elect Donald Trump publicly expressed support for recreational cannabis legalization efforts in his home state of Florida. He also backed up the industry’s access to the banking system and the ongoing federal cannabis rescheduling process. Whether this support will actually translate into wide-reaching cannabis reform remains to be seen. However, it puts to rest any previous concerns that Donald Trump could actually cancel the rescheduling process altogether if he gets re-elected since the process is under the purview of the US Department of Justice.
The US Cannabis Council, expressing its optimism for the sector under Trump’s presidency, stated:
“The cannabis community has every reason to be optimistic with President Trump returning to the White House. He has endorsed the SAFE Banking Act and reclassification of cannabis. We look forward to working with his administration to advance meaningful federal reform.”
That said, the withdrawal of Matt Gaetz, a vocal proponent of federal legalization, as Trump’s nominee for attorney-general after allegations of sexual misconduct was highly discouraging for the country’s cannabis advocates. Moreover, a great deal of reforms will still have to get through both the House and the Senate, which will require some level of bipartisan cooperation.
As for the federal cannabis rescheduling process, the Drug Enforcement Administration held preliminary hearings on the matter in December and these are expected to conclude in March. Perhaps the most significant relief from the change will come in the form of tax reform. Currently, companies selling cannabis cannot deduct normal business expenses from their tax bill, costing them more than $2.2 billion in extra taxes than what would be paid if they were treated as mainstream businesses. If federal rescheduling happens, it is expected to improve the overall cash flow of the industry by $3.1 billion in 2026, helping improve the profitability of cannabis companies and giving their investors some much-needed optimism, even if Trump’s other promises go up in smoke.
Methodology
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 7 companies operating in the cannabis sector with the highest number of hedge fund investors. When two or more companies had the same number of hedge funds investing in them, we ranked them by the revenue of their last financial year instead. Following are the Best CBD Stocks According to Hedge Funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A laboratory with white-coated technicians carefully measuring out cannabis extracts.
Tilray Brands, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Holders: 16
The New York-based Tilray Brands, Inc. (NASDAQ:TLRY) has a highly diversified global portfolio with operations in Canada, the United States, Europe, Australia, and Latin America. The company has businesses in medical adult-use cannabis, beverages, spirits, wellness products, and a vast array of consumer-connected lifestyle brands.
The core business of Tilray Brands, Inc. (NASDAQ:TLRY) is cannabis and it is the number one cannabis operator in Canada, the leading medical cannabis business across Europe, and the top branded hemp business in North America. The company has further strengthened its presence in Europe recently by winning a tender from Luxembourg’s Ministry of Health and Social Security to supply medical cannabis flower to the country.
Last year, Tilray Brands, Inc. (NASDAQ:TLRY) also entered the lucrative US THC beverage market with a range of Delta-9 THC mocktails and seltzers through its newly formed Tilray Alternative Beverages business unit. The company is hoping to dominate the rapidly ballooning market for cannabis-infused drinks and ended 2024 with the release of a new line of Delta-9 THC-infused mocktails through its Herb & Bloom brand.
Due to the slower-than-expected marijuana legalization policies in the US and the EU, and the saturation of the cannabis market in Canada, Tilray Brands, Inc. (NASDAQ:TLRY) is following an aggressive diversification strategy and even forayed into alcohol last year with the acquisition of several craft breweries. The move seems to be paying off and Tilray’s alcohol business now accounts for 28% of its revenue, whereas 31% came from cannabis. The company also recently moved into the rapidly growing non-alcoholic beer segment with the launch of several NA craft brews through its Montauk Brewing Co. and Runner’s High brands.
Tilray Brands, Inc. (NASDAQ:TLRY) ended its Q1 2025 with $287.9 million in long-term debt and $280.1 million in cash, equivalents, and short-term investments. The company’s financial strength enables it to pursue new opportunities and capitalize on emerging trends in the market.
At the end of Q3 2024, shares of Tilray Brands, Inc. (NASDAQ:TLRY) were held by 16 hedge funds in the IM database with a total stake value of $20.62 million, up 36% from the previous quarter.
Overall, TLRY ranks 2nd on our list of best CBD stocks to invest in right now. While we acknowledge the potential for TLRY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TLRY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
