It's possible that the reason it is grayed out is because it is on the cloud instead of your phones storage. Try downloading it to local storage and see if that helps.
Personally I would do this the following way...
Open the Drive app and locate your mp3 on the list.
Tap on 3 dots and choose download.
Once the download is complete, swipe up to open the app tray and open the Files app.
Locate the file in your download folder using the files app and play the file.
Once playing pause it then tap 3 dots top right and choose set as ringtone.
Scott