Tilray Brands (TLRY) stock price could plunge by 17% soon

Tilray Brands (NASDAQ: TLRY) stock price has been in a freefall this year as concerns about the cannabis industry. The shares crashed to a low of $1.83 on Tuesday, down by more than 46% from the highest point in September. Other companies like Curaleaf, Aurora Cannabis, Canopy Growth, and Truelive Cannabis have also plunged.

Cannabis woes continue

Tilray Brands is one of the biggest companies in the cannabis industry. The company has grown both organically and inorganically over the years. It has acquired firms like HEXO, Redhook, Aphria, and Natura Naturals. Most recently, it expanded its business by acquiring eight beer brands from AB InBev.

Tilray Brands and other cannabis companies have struggled in the past few years. For one, they have faced numerous headwinds in the United States, where politicians have struggled to move ahead with a comprehensive cannabis regulation. Cannabis companies have also faced significant competition in the past few years.

The company’s business is not growing as fast as it did a few years ago. Its revenue in the most recent quarter came in at $177 million, a 15% increase from the same quarter in 2022. Its Canadian cannabis revenue rose by 16% while the international revenue soared by over 37%.

Tilray Brands also made a lot of progress in the past few months. It has reduced its total debt by $177 million this year. Also, its synergies in the HEXO deal has moved to $27 million in the past few months.

Further, the company has made a lot of progress in the beverage business. It has acquired several craft beer businesses from AB InBev. This diversification is an important one since it cushions it from the challenging cannabis industry. 

Its beverage business revenue rose by 17% in the last quarter to $24.2 million. Tilray hopes that its alcoholic business revenue will move to $300 million.

Therefore, Tilray seems better positioned than other cannabis companies that focus on single products. 

Tilray Brands stock price forecast

TLRY chart by TradingView

The TLRY share price has been in a strong downward trend in the past few months. It has pared back most of the gains it made a few months ago when it peaked at $3.39. The stock has remained below the 50-day and 100-day moving averages.

The TRIX indicator has pointed downwards while the Relative Strength Index (RSI) has dropped below the neutral point of 50. Further, it has dropped below the important support level at $2.17, the lowest point on April 26th.

Therefore, the outlook for the Tilray Brands stock price is bearish, with the next support point to watch being at $1.50. This price is in line with my recent Tilray forecast.

This price is the lowest point this year and is over 16.90% from the current level. A drop below that support will open the possibility of it falling to $1.0.

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