Tilray (TLRY) shares are down more than 7% in morning trading today after the cannabis company confirmed it has requested an extension to regain compliance with the minimum listing requirements of the Nasdaq Exchange. In March, the company initially reported that the Nasdaq had given it 180 days to meet listing requirements, putting its deadline at Sept. 21. 

“With this extension request, we are giving the market additional time to demonstrate confidence in our long-term strategy,” said CEO Irwin Simon in a press release this week. If the Nasdaq grants this extension request, Tilray will likely receive an additional 180 days to satisfy the requirements. 

Tilray stock has been on an absolute tear in recent weeks. At the time of writing, it’s up well over 80% in the past month. 

Why Has Tilray Stock Ripped Higher in Recent Weeks

TLRY shares have been in favor with retail investors this month because President Donald Trump’s administration is actively considering reclassifying cannabis as a Schedule III drug. 

This would ease federal restrictions, reduce tax burdens, and unlock broader institutional interest, all of which could translate to an increase in the Tilray stock price over time. 

Additionally, the company’s recently secured partnership to distribute medical cannabis in Italy has bolstered its international growth narrative, adding credibility to its long-term strategy as well. 

Put it together with the management’s confidence that Tilray has “multiple options to meet Nasdaq requirements” and TLRY stock starts to look increasingly attractive, despite its recent rally. 

Why TLRY Shares May Not Be Worth Owning

Despite the aforementioned positives and the management’s upbeat commentary, Tilray shares remain high-risk investment given the company lacks the financial strength to warrant any further upside.

In its latest reported quarter, the cannabis specialist saw $224.5 million in revenue and lost $1.30 per share – both worse than expectations. 

More importantly, TLRY’s operating margin cratered rather sharply, resulting in negative free cash flow of $13.15 million in the second quarter. 

How Wall Street Recommends Playing Tilray Brands

Investors should also note that Wall Street doesn’t currently forecast particularly exciting upside in Tilray stock from here. 

While the consensus rating on TLRY shares remains at “Moderate Buy,” the mean target of $1.27 implies just 16% upside potential.