Tilray Inc. (TLRY) experienced a 6.52% plunge on Friday, reflecting the broader struggles facing the cannabis industry in the United States. Despite sustained growth in certain markets and sectors, the industry as a whole is confronting headwinds that are impacting investor confidence and financial performance.

One significant factor contributing to Tilray's decline is the slowing growth and rising business failures in the U.S. cannabis market. According to a recent report by Whitney Economics, while the industry achieved its 11th consecutive year of revenue growth in 2024, the expansion slowed to just 6% compared to previous years. Alarmingly, nearly 1,000 fewer active cannabis licenses were reported by the end of 2024, with a staggering 72.7% of operators reporting unprofitable operations.

The report cites the lack of federal action on issues such as banking access, tax reform, and interstate commerce as major barriers hindering the industry's growth and profitability. Without substantial policy changes at the federal level, Whitney Economics warns that business failures will continue to accelerate in 2025, further eroding investor confidence and impacting stock valuations for companies like Tilray.