Tilray (TLRY) shares are ripping higher on Monday after a senior Jefferies analyst issued a positive note in favor of the cannabis specialist.

Kaumil Gajrawala maintained his “Buy” rating on the New York-headquartered firm and raised his price target to $2, indicating potential upside of another 50% from current levels. 

Jefferies’ bullish call is particularly significant since Tilray stock is already up some 300% versus its year-to-date low in late June. 

Why Is Jefferies Bullish on Tilray Stock?

Kaumil Gajrawala believes President Donald Trump’s administration will soon reschedule cannabis as a Schedule III drug, clearing the path for significant further upside in TLRY stock. 

The aforementioned rescheduling would remove key federal restrictions that currently hinder Tilray’s profitability and growth. 

For example, it would allow the cannabis firm to claim standard business tax deductions under IRS Code 280E, dramatically improving its bottom line. 

Plus, the reclassification would legitimize medical cannabis at the federal level, expanding access and accelerating demand, which could translate to continued momentum in Tilray shares. 

TLRY Shares Retain Momentum Despite Weak Q2

If the Trump administration indeed proceeds with reclassifying cannabis as a Schedule III drug, it may also open the door for institutional investors and major banks to engage with TLRY shares. 

Jefferies sees the Nasdaq-listed firm as “the biggest potential beneficiary” of rescheduling since it could mark a turning point for Tilray’s financial and strategic outlook. 

Moderate debt levels and strong liquidity were among other reasons the investment firm cited for its bullish view on Tilray stock. 

Note that Kaumil Gajrawala remains constructive on the cannabis company even though it came in shy of Street estimates in its latest reported quarter. 

Is There Any Further Upside Left in Tilray Shares?

Despite expectations of positive regulatory developments ahead, Wall Street recommends caution in buying Tilray shares at current levels. 

While the consensus rating on TLRY stock remains at “Moderate Buy,” the mean target of $1.27 is already in line with the price at which its trading at the time of writing.