Tilray Brands Inc. (TLRY) is having a rough Tuesday as investors react to the cannabis company's reverse stock split taking effect. The stock was down more than 3% as the one-for-10 consolidation officially kicked in.

What's Behind the Split

Tilray announced the reverse split plans last week, following approval at the company's special stockholder meeting back in June. Starting Tuesday, every 10 outstanding shares of Tilray common stock were automatically converted into one share.

The company frames this as a strategic move with multiple benefits. First, it's meant to bring the share count more in line with comparable companies. Second, Tilray believes a higher per-share price will make the stock more attractive to institutional investors. And third, there's a practical cost consideration—the company estimates it could save up to $1 million annually in expenses related to shareholder meetings.

The Technical Picture Isn't Pretty

From a technical standpoint, Tilray is struggling. The stock is currently trading 46.7% below its 50-day moving average and 15.1% below its 200-day moving average. That's a significant disconnect that signals sustained downward pressure and difficulty gaining momentum in a challenging market.

The 52-week range tells the story of volatility—spanning from $3.50 to $23.20. Right now, shares are hovering much closer to the bottom of that range, reflecting cautious or outright pessimistic investor sentiment.

Traders are watching key levels closely. Support appears to be around $7.00, which could act as a psychological floor. If the stock breaks below that mark, it might test the lower end of its 52-week range. On the upside, resistance is likely around $8.00, where sellers could emerge to cap any rally attempts.

Price Action: Tilray shares were down 3.58%, trading at $7.54 at the time of publication on Tuesday, according to Benzinga Pro.