While Sen. Chuck Schumer (D-N.Y.) is preparing federal legislation on marijuana legalization, CIBC analyst John Zamparo says it's not going to benefit Tilray (NASDAQ:TLRY) this year, even if it is a positive catalyst for the company over the long term.

So in the wake of Tilray's 33% share price run-up following its acquisition of Aphria, Zamparo downgraded the marijuana producer's stock because, in his view, there's little upside left right now.

Person wearing green headphones and sunglasses stands outside, smoking.

Image source: Getty Images.

In a research note to investors, Zamparo downgraded Tilray from outperform to neutral. The bill being crafted by Schumer, the Senate majority leader, would provide a potential growth driver for the company if it is eventually passed, but "it's uncertain to lead to meaningful change this year."

Details of the bill have not yet been made public, and even if it passed the Senate unchanged following rigorous debate, it would still have to go through the House of Representatives. Changes made there would require a reconciliation process, with both houses of Congress having to weigh in again before potentially sending a legalization bill to President Biden for his signature. It promises to be a long process.

In the meantime, though, while Tilray's acquisition of Aphria was itself a positive development, much of the upside from that deal has already been priced into the stock. It closed yesterday at around $20 per share, up by more than 140% year to date.

Despite downgrading Tilray, Zamparo left his price target on the stock unchanged at $25 per share. While he asserted that its current valuation "leaves little upside from here," that price target does imply that he thinks there's still some 20% more upside to be realized.

It's probably true, though, that until there is some movement on U.S. marijuana legalization, there will remain a ceiling on Tilray's potential upward mobility.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.