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What changed in Tilray Brands, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Tilray Brands, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+460 added−420 removedSource: 10-K (2025-07-29) vs 10-K (2024-07-30)

Top changes in Tilray Brands, Inc.'s 2025 10-K

460 paragraphs added · 420 removed · 269 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

147 edited+64 added−39 removed369 unchanged
Biggest changeWe report our operating results in four reportable segments: • Beverage alcohol – Production, marketing and sale of beverages • Cannabis – Cultivation, production, distribution and sale of both medical and adult-use cannabis products • Distribution – Purchase, resale and distribution of pharmaceutical and wellness products • Wellness – Production, marketing and distribution of hemp-based food and other wellness products Revenue in these four reportable business segments, and the year over year comparison, is as follows: Year Ended % of Total Year Ended % of Total Year Ended % of Total (In thousands of U.S. dollars) May 31, 2024 Revenue May 31, 2023 Revenue May 31, 2022 Revenue Beverage alcohol business $ 202,094 25 % $ 95,093 15 % $ 71,492 11 % Cannabis business 272,798 35 % 220,430 35 % 237,522 38 % Distribution business 258,740 33 % 258,770 41 % 259,747 41 % Wellness business 55,310 7 % 52,831 9 % 59,611 10 % Total net revenue $ 788,942 100 % $ 627,124 100 % $ 628,372 100 % 6 Revenue in these four reportable business segments as reported in constant currency 1 , and the year over year comparison, is as follows: Year Ended Year Ended May 31, 2024 May 31, 2023 (In thousands of U.S. dollars) as reported in constant currency % of Total Revenue as reported in constant currency % of Total Revenue Beverage alcohol business $ 202,094 25 % $ 95,093 15 % Cannabis business 274,763 35 % 220,430 35 % Distribution business 259,671 33 % 258,770 41 % Wellness business 55,533 7 % 52,831 9 % Total net revenue $ 792,061 100 % $ 627,124 100 % Revenue from our cannabis operations from the following sales channel and the year over year comparison is as follows: Year Ended % of Total Year Ended % of Total Year Ended % of Total (In thousands of U.S. dollars) May 31, 2024 Revenue May 31, 2023 Revenue May 31, 2022 Revenue Revenue from Canadian medical cannabis $ 25,211 9 % $ 25,000 11 % $ 30,599 13 % Revenue from Canadian adult-use cannabis 266,846 98 % 214,319 97 % 209,501 88 % Revenue from wholesale cannabis 25,340 9 % 1,436 1 % 6,904 3 % Revenue from international cannabis 53,295 20 % 43,559 20 % 53,887 23 % Less excise taxes (97,894 ) (36 )% (63,884 ) (29 )% (63,369 ) (27 )% Total $ 272,798 100 % $ 220,430 100 % $ 237,522 100 % Revenue from our cannabis operations from the following sales channel as reported in constant currency 1 and the year over year comparison is as follows: Year Ended Year Ended May 31, 2024 May 31, 2023 (In thousands of U.S. dollars) as reported in constant currency % of Total Revenue as reported in constant currency % of Total Revenue Revenue from Canadian medical cannabis $ 25,441 10 % $ 25,000 11 % Revenue from Canadian adult-use cannabis 269,534 98 % 214,319 97 % Revenue from wholesale cannabis 25,651 9 % 1,436 1 % Revenue from international cannabis 53,036 19 % 43,559 20 % Less excise taxes (98,899 ) (36 )% (63,884 ) (29 )% Total $ 274,763 100 % $ 220,430 100 % (1) The constant currency presentation of our Cannabis revenue based on market channel is a non-GAAP financial measure.
Biggest changeNet revenue in these four reportable business segments, and the year-over-year comparison, is as follows: Year Ended % of Total Year Ended % of Total Year Ended % of Total (In thousands of U.S. dollars) May 31, 2025 Revenue May 31, 2024 Revenue May 31, 2023 Revenue Beverage business 240,595 29 % 202,094 25 % 95,093 15 % Cannabis business 249,001 30 % 272,798 35 % 220,430 35 % Distribution business 271,228 33 % 258,740 33 % 258,770 41 % Wellness business 60,485 8 % 55,310 7 % 52,831 9 % Total net revenue 821,309 100 % 788,942 100 % 627,124 100 % 6 Net revenue in these four reportable business segments as reported in constant currency 1 , and the year-over-year comparison, is as follows: Year Ended Year Ended May 31, 2025 May 31, 2024 (In thousands of U.S. dollars) as reported in constant currency % of Total Revenue as reported in constant currency % of Total Revenue Beverage business 240,595 29 % 202,094 25 % Cannabis business 254,584 31 % 272,798 35 % Distribution business 277,187 33 % 258,740 33 % Wellness business 61,370 7 % 55,310 7 % Total net revenue 833,736 100 % 788,942 100 % Revenue from our cannabis operations from the following sales channels and the year-over-year comparison is as follows: Year Ended % of Total Year Ended % of Total Year Ended % of Total (In thousands of U.S. dollars) May 31, 2025 Revenue May 31, 2024 Revenue May 31, 2023 Revenue Revenue from Canadian medical cannabis 24,998 10 % 25,211 9 % 25,000 11 % Revenue from Canadian adult-use cannabis 224,048 91 % 266,846 98 % 214,319 97 % Revenue from wholesale cannabis 18,207 7 % 25,340 9 % 1,436 1 % Revenue from international cannabis 63,356 25 % 53,295 20 % 43,559 20 % Less excise taxes (81,608 ) (33 )% (97,894 ) (36 )% (63,884 ) (29 )% Total 249,001 100 % 272,798 100 % 220,430 100 % Revenue from our cannabis operations from the following sales channels as reported in constant currency 1 and the year-over-year comparison is as follows: Year Ended Year Ended May 31, 2025 May 31, 2024 (In thousands of U.S. dollars) as reported in constant currency % of Total Revenue as reported in constant currency % of Total Revenue Revenue from Canadian medical cannabis 25,797 10 % 25,211 9 % Revenue from Canadian adult-use cannabis 230,953 91 % 266,846 98 % Revenue from wholesale cannabis 18,779 7 % 25,340 9 % Revenue from international cannabis 63,211 25 % 53,295 20 % Less excise taxes (84,156 ) (33 )% (97,894 ) (36 )% Total 254,584 100 % 272,798 100 % (1) The constant currency presentation of our Cannabis revenue based on market channel is a non-GAAP financial measure.
The EU system for certification of GMP allows a Competent Authority of any EU member state to conduct inspections of manufacturing sites and, if the strict EU-GMP standards are met, to issue a certificate of EU-GMP compliance that is also accepted in other EU member countries.
The EU system for certification of EU-GMP allows a Competent Authority of any EU member state to conduct inspections of manufacturing sites and, if the strict EU-GMP standards are met, to issue a certificate of EU-GMP compliance that is also accepted in other EU member countries.
As a result of the 2018 Farm Bill, federal law dictates that CBD and THC derived from Hemp is not a controlled substance; however, CBD derived from Hemp may still be considered a controlled substance under applicable state law. Individual states take varying approaches to regulating the production and sale of Hemp and Hemp-derived CBD and THC.
As a result of the 2018 Farm Bill, federal law dictates that CBD and THC derived from Hemp is not a controlled substance; however, CBD and THC derived from Hemp may still be considered a controlled substance under applicable state law. Individual states take varying approaches to regulating the production and sale of Hemp and Hemp-derived CBD and THC.
Through donations to the Erie Shores Community Hospital in Leamington, support to our Canadian veterans and other compassionate use cannabis programs, and donations to the Waterkeeper Alliance in from Sweetwater's 420 fest, we aim to address local needs and contribute to social development.
Through donations to the Erie Shores Community Hospital in Leamington, support to our Canadian veterans and other compassionate use cannabis programs, and donations to the Waterkeeper Alliance from Sweetwater's 420 fest, we aim to address local needs and contribute to social development.
Risks related to the Beverage Alcohol Business Changes in consumer preferences or public attitudes about alcohol could decrease demand for our beverage alcohol products.
Risks related to the Beverage Business Changes in consumer preferences or public attitudes about alcohol could decrease demand for our beverage products.
If general consumer trends lead to a decrease in the demand for our beers and other alcohol products or Breckenridge’s whiskey products, including craft beer, our sales and results of operations in the beverage alcohol segment may be adversely affected. There is no assurance that the craft brewing segment will experience growth in future periods.
If general consumer trends lead to a decrease in the demand for our beers and other alcohol products or Breckenridge’s whiskey products, including craft beer, our sales and results of operations in the beverage segment may be adversely affected. There is no assurance that the craft brewing segment will experience growth in future periods.
Our management team is complemented by experienced operators, cannabis industry experts, veteran beer and beverage industry leaders and leaders that are well-established in wellness foods, all of whom apply an innovative and consumer-centric approach to our businesses. 4 To achieve our vision of building the leading global lifestyle consumer products company that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection, we will focus on the following strategies: • Build global brands that lead in their respective industries by winning the hearts and minds of our consumers and patients .
Our management team is complemented by experienced operators, cannabis industry experts, veteran beer and beverage industry specialists and leaders that are well-established in wellness foods, all of whom apply an innovative and consumer-centric approach to our businesses. 4 To achieve our vision of building the leading global lifestyle consumer products company that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection, we will focus on the following strategies: • Build global brands that lead in their respective industries by winning the hearts and minds of our consumers and patients .
Our Company Tilray Brands, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company”, “Tilray”, “we”, “us” and “our”) is a leading global lifestyle consumer products company, which was incorporated on January 24, 2018 and is headquartered in Leamington and New York, with operations in Canada, the United States, Europe, Australia, New Zealand and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection.
Our Company Tilray Brands, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company”, “Tilray”, “we”, “us” and “our”) is a leading global lifestyle consumer products company, which was incorporated on January 24, 2018 and is headquartered in Leamington and New York, with operations in Canada, the United States, Europe, Australia, and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection.
The market price of our common stock may continue to be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including the following: (i) actual or anticipated fluctuations in our quarterly results of operations; (ii) recommendations by securities research analysts; (iii) changes in the economic performance or market valuations of other issuers that investors deem comparable to us; (iv) the addition or departure of our executive officers or other key personnel; (v) the release or expiration of lock-up or other transfer restrictions on our common stock; (vi) sales or perceived sales, or the expectation of future sales, of our common stock; (vii) significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; (viii) news reports or social media relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in the cannabis industry or our target markets; and (ix) the increase in the number of retail investors and their participation in social media platforms targeted at speculative investing. 32 The volatility of our stock and the stockholder base may hinder or prevent us from engaging in beneficial corporate initiatives.
The market price of our common stock may continue to be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including the following: (i) actual or anticipated fluctuations in our quarterly results of operations; (ii) recommendations by securities research analysts; (iii) changes in the economic performance or market valuations of other issuers that investors deem comparable to us; (iv) the addition or departure of our executive officers or other key personnel; (v) the release or expiration of lock-up or other transfer restrictions on our common stock; (vi) sales or perceived sales, or the expectation of future sales, of our common stock; (vii) significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; (viii) news reports or social media relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in the cannabis industry or our target markets; and (ix) the increase in the number of retail investors and their participation in social media platforms targeted at speculative investing. 31 The volatility of our stock and the stockholder base may hinder or prevent us from engaging in beneficial corporate initiatives.
In Canada, we produce, market and sell the most comprehensive portfolio of adult-use cannabis and medical form factors, including whole flower, pre-rolls, vapes, topicals, edibles (gummies and chocolates) and beverages. We plan to continue to develop innovative products that possess the most consumer demand and are truly differentiated from our competitors, while optimizing our cultivation and production facilities.
In Canada, we produce, market and sell one of the most comprehensive portfolio of adult-use cannabis and medical form factors, including whole flower, pre-rolls, vapes, topicals, edibles (gummies and chocolates) and beverages. We plan to continue to develop innovative products that possess the most consumer demand and are truly differentiated from our competitors, while optimizing our cultivation and production facilities.
We understand that climate change presents both risks and opportunities to our business. As a global cannabis-lifestyle and consumer products company, we recognize that climate-related risks may include changing weather patterns, water scarcity, and regulatory developments related to emissions and energy consumption. These risks can affect our supply chain, cultivation processes, and distribution networks, potentially impacting our financial performance.
We understand that climate change presents both risks and opportunities to our business. As a global lifestyle consumer products company, we recognize that climate-related risks may include changing weather patterns, water scarcity, and regulatory developments related to emissions and energy consumption. These risks can affect our supply chain, cultivation processes, and distribution networks, potentially impacting our financial performance.
If the markets for wine, spirits or flavored alcohol beverages continue to grow, this could draw consumers away from the industry in general and our beverage alcohol products specifically. Further, the alcoholic beverage industry is subject to public concern and political attention over alcohol-related social problems, including drunk driving, underage drinking and health consequences from the misuse of alcohol.
If the markets for wine, spirits or flavored alcohol beverages continue to grow, this could draw consumers away from the industry in general and our beverage products specifically. Further, the beverage industry is subject to public concern and political attention over alcohol-related social problems, including drunk driving, underage drinking and health consequences from the misuse of alcohol.
In cannabis, our state-of-the-art facilities are among the lowest cost production operations with the capabilities to produce a complete portfolio of form factors and products, including flower, pre-roll, capsules, vapes, edibles and beverages. In beverage alcohol, we are focused on integrating our recently acquired craft brands and improving our cost structure.
In cannabis, our state-of-the-art facilities are among the lowest cost production operations with the capabilities to produce a complete portfolio of form factors and products, including flower, pre-roll, capsules, vapes, edibles and beverages. In beverage, we are focused on integrating our recently acquired craft brands and improving our cost structure.
Additionally, as domestic breweries and distillery, we maintain certain competitive advantages over imported beers and spirits, such as lower transportation costs, a lack of import charges and superior product freshness. Cannabis Segment Our Brands and Products Our Medical Cannabis Brands We were among the first companies to be permitted to cultivate and sell legal medical cannabis.
Additionally, as our breweries and distillery are domestic, we maintain certain competitive advantages over imported beers and spirits, such as lower transportation costs, a lack of import charges and superior product freshness. Cannabis Segment Our Brands and Products Our Medical Cannabis Brands We were among the first companies to be permitted to cultivate and sell legal medical cannabis.
In reaction to these concerns, steps may be taken to restrict advertising, to impose additional cautionary labeling or packaging requirements, or to increase excise or other taxes on beverage alcohol products. Any such developments may have an adverse impact on the financial condition, operating results and cash flows for our beverage alcohol businesses.
In reaction to these concerns, steps may be taken to restrict advertising, to impose additional cautionary labeling or packaging requirements, or to increase excise or other taxes on beverage products. Any such developments may have an adverse impact on the financial condition, operating results and cash flows for our beverage businesses.
In the United States, each of SweetWater, Breckenridge, Montauk and our other craft brands sells its alcohol beverages to independent distributors for distribution to retailers and, ultimately, to consumers. No assurance can be given that SweetWater, Breckenridge, Montauk and our other craft brands will be able to maintain their current distribution networks or secure additional distributors on favorable terms.
In the United States, each of SweetWater, Breckenridge, Montauk and our other craft brands sells its beverages to independent distributors for distribution to retailers and, ultimately, to consumers. No assurance can be given that SweetWater, Breckenridge, Montauk and our other craft brands will be able to maintain their current distribution networks or secure additional distributors on favorable terms.
Furthermore, there is no assurance that we will be able to secure the requisite import and export permits for the international distribution of our products. Countries may also impose restrictions or limitations on imports that require the use of, or confer significant advantages upon, producers within that particular country.
Furthermore, there is no assurance that we will be able to timely secure the requisite import and export permits for the international distribution of our products. Countries may also impose restrictions or limitations on imports that require the use of, or confer significant advantages upon, producers within that particular country.
Manufacturers and distributors of cannabis, hemp and beverage alcohol products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, adulteration, unintended harmful side effects or interactions with other substances, packaging safety, and inadequate or inaccurate labeling disclosure.
Manufacturers and distributors of cannabis, hemp and beverage products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, adulteration, unintended harmful side effects or interactions with other substances, packaging safety, and inadequate or inaccurate labeling disclosure.
While these markets are still at various stages of development, and the regulatory environment around them is either newly formed or still being formed, we are uniquely positioned to bring the knowledge and expertise gained in Canada and leverage our operational footprint in order to generate profitable growth in these geographies.
While these markets are still in various stages of development, and the regulatory environment around them is either newly formed or still being formed, we are uniquely positioned to bring the knowledge and expertise gained in Canada and leverage our operational footprint in order to generate profitable growth in these geographies.
Moreover, future governmental actions in countries where we operate, or export products, may limit or altogether restrict the import and/or export of cannabis products. 16 Any future cannabis production facilities that we operate in Canada or elsewhere will also be subject to separate licensing requirements under the CR or applicable local requirements.
Moreover, future governmental actions in countries where we operate, or import/export products, may limit, delay or altogether restrict the import and/or export of cannabis products. 16 Any future cannabis production facilities that we operate in Canada or elsewhere will also be subject to separate licensing requirements under the CR or applicable local requirements.
Manitoba Harvest products are sold in major retailers across the U.S. and Canada. Tilray Wellness also manufactures, markets, and distributes wellness beverages, including HiBall Energy and Happy Flower. HiBall Energy was acquired through the Craft acquisition and is made with zero sugar, zero calories, and organic caffeine.
Manitoba Harvest products are sold in major retailers across the U.S. and Canada. Tilray Wellness also manufactures, markets, and distributes wellness beverages, including HiBall Energy and Happy Flower. HiBall Energy was acquired through Craft Acquisition I and is made with zero sugar, zero calories, and organic caffeine.
Because of the numerous risks and uncertainties associated with producing and selling cannabis and beverage alcohol products, as outlined herein, we are unable to accurately predict when, or if, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
Because of the numerous risks and uncertainties associated with producing and selling cannabis and beverage products, as outlined herein, we are unable to accurately predict when, or if, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
Our substantial consolidated indebtedness (refer to the consolidated financial statements included elsewhere in this Form 10-K) may increase our vulnerability to any generally adverse economic and industry conditions. We and our subsidiaries may, subject to the limitations in the terms of our existing and future indebtedness, incur additional debt, secure existing or future debt or recapitalize our debt.
Our consolidated indebtedness (refer to the consolidated financial statements included elsewhere in this Form 10-K) may increase our vulnerability to any generally adverse economic and industry conditions. We and our subsidiaries may, subject to the limitations in the terms of our existing and future indebtedness, incur additional debt, secure existing or future debt or recapitalize our debt.
With the proliferation of participants and offerings in the wider alcohol beverage market and within the craft beer and craft spirits segments, we face significant competition. There have also been numerous acquisitions and investments in craft brewers by larger breweries and private equity and other investors, which further intensified competition within the craft beer market.
With the proliferation of participants and offerings in the wider beverage market and within the craft beer and craft spirits segments, we face significant competition. There have also been numerous acquisitions and investments in craft brewers by larger breweries and private equity and other investors, which further intensified competition within the craft beer market.
In the event of federal legalization in the U.S., we expect to be well-positioned to compete in the U.S. cannabis market given our portfolio of strong brands and distribution system in addition to our track record of growth in consumer-packaged goods and cannabis products.
Lastly, in the event of federal legalization in the U.S., we expect to be well-positioned to compete in the U.S. cannabis market given our portfolio of strong brands and distribution system in addition to our track record of growth in consumer-packaged goods and cannabis products.
If we experience contraction in our sales and production volumes, the excess capacity and unabsorbed overhead may have an adverse effect on gross margins, operating cash flows and overall financial performance of our beverage alcohol businesses.
If we experience contraction in our sales and production volumes, the excess capacity and unabsorbed overhead may have an adverse effect on gross margins, operating cash flows and overall financial performance of our beverage businesses.
Our production and processing facilities are integral to our business and adverse changes or developments affecting our facilities may have an adverse impact on our business. Our cultivation and processing facilities are integral to our business and the licenses issued by applicable regulatory authorities is specific to each of these facilities.
Our production and processing facilities are integral to our business and adverse changes or developments affecting our facilities may have an adverse impact on our business. Our cultivation and processing facilities are integral to our business and the licenses issued by applicable regulatory authorities are specific to each of these facilities.
A decrease in our market capitalization or profitability, or unfavorable changes in market, economic or industry conditions could increase the risk of additional impairment. Any resulting additional impairments could have a negative impact on our stock price.
A further decrease in our market capitalization or profitability, or unfavorable changes in market, economic or industry conditions could increase the risk of additional impairment. Any resulting additional impairments could have a negative impact on our stock price.
If our current designated qualified person in charge fails to maintain their security clearance, or leaves us and we are unable to find a suitable replacement who meets these requirements, we may no longer be able to continue our clinical trial activities. 25 Increased labor costs, potential organization of our workforce, employee strikes, work stoppages, and other labor-related disruption may adversely affect our business, financial conditions and operations.
If our current designated qualified person in charge fails to maintain their security clearance, or leaves us and we are unable to find a suitable replacement who meets these requirements, we may no longer be able to continue our clinical trial activities. 24 Increased labor costs, potential organization of our workforce, employee strikes, work stoppages, and other labor-related disruption may adversely affect our business, financial conditions and operations.
Our results of operations and cash flows could be adversely affected by additional taxes imposed on us prospectively or retroactively or additional taxes or penalties resulting from the failure to comply with any collection obligations or failure to provide information for tax reporting purposes to various government agencies. 31 We may not be able to utilize our net operating loss carryforwards which could result in greater than anticipated tax liabilities.
Our results of operations and cash flows could be adversely affected by additional taxes imposed on us prospectively or retroactively or additional taxes or penalties resulting from the failure to comply with any collection obligations or failure to provide information for tax reporting purposes to various government agencies. 30 We may not be able to utilize our net operating loss carryforwards which could result in greater than anticipated tax liabilities.
We may be required to compensate those suffering loss or damage due to our operations and may have civil or criminal fines or penalties imposed for violations of applicable environmental laws or regulations. 28 Changes in applicable safety, health and environmental standards may impose stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees.
We may be required to compensate those suffering loss or damage due to our operations and may have civil or criminal fines or penalties imposed for violations of applicable environmental laws or regulations. 27 Changes in applicable safety, health and environmental standards may impose stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees.
As a result, we may be required to establish facilities in one or more countries in the EU (or elsewhere) where we wish to distribute our products in order to take advantage of the favorable legislation offered to producers in these countries. 23 We are required to comply concurrently with all applicable laws in each jurisdiction where we operate or to which we export our products, and any changes to such laws could adversely impact our business.
As a result, we may be required to establish facilities in one or more countries in the EU (or elsewhere) where we wish to distribute our products in order to take advantage of the favorable legislation offered to producers in these countries. 22 We are required to comply concurrently with all applicable laws in each jurisdiction where we operate or to which we export our products, and any changes to such laws could adversely impact our business.
Although we primarily grow our products indoors under climate-controlled conditions, we also have certain outdoor cultivation capacity and there can be no assurance that natural elements, such as insects, climate change and plant diseases, will not interrupt our production activities or have an adverse effect on our business. 24 We depend on significant customers for a substantial portion of our revenue.
Although we primarily grow our products indoors under climate-controlled conditions, we also have certain outdoor cultivation capacity and there can be no assurance that natural elements, such as insects, climate change and plant diseases, will not interrupt our production activities or have an adverse effect on our business. 23 We depend on significant customers for a substantial portion of our revenue.
If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, we may be exposed to material uninsured liabilities that could diminish our liquidity, profitability or solvency. 35 The financial reporting obligations of being a public company and maintaining a dual listing on the TSX and on NASDAQ requires significant company resources and management attention.
If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, we may be exposed to material uninsured liabilities that could diminish our liquidity, profitability or solvency. 34 The financial reporting obligations of being a public company and maintaining a dual listing on the TSX and on NASDAQ requires significant company resources and management attention.
In addition, legal proceedings covering a wide range of matters are pending or threatened in various U.S. and foreign jurisdictions against the Company. The type of claims that may be raised in these proceedings include product liability, unfair trade practices, antitrust, tax, contraband shipments, patent infringement, employment matters, claims for contribution and claims of competitors, shareholders or distributors.
In addition, legal proceedings covering a wide range of matters are pending or threatened in various U.S. and foreign jurisdictions against the Company. The types of claims that may be raised in these proceedings include product liability, unfair trade practices, antitrust, tax, contraband shipments, patent infringement, employment matters, claims for contribution and claims of competitors, shareholders or distributors.
Significant disruption to our information technology system or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. 29 The cannabis industry continues to face significant funding challenges, and we may not be able to secure adequate or reliable sources of funding, which may impact our operations and potential expansion.
Significant disruption to our information technology system or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. 28 The cannabis industry continues to face significant funding challenges, and we may not be able to secure adequate or reliable sources of funding, which may impact our operations and potential expansion.
Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 30 It is not expected that our disclosure controls and procedures and internal controls over financial reporting will prevent all error or fraud.
Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 29 It is not expected that our disclosure controls and procedures and internal controls over financial reporting will prevent all error or fraud.
We continually set the bar higher for ourselves by encouraging and embracing innovative thinking, crafting an environment where new ideas are valued, and growth opportunities and continuous improvement are cultivated. Respect: We treat everyone with dignity and consideration, acknowledging the diverse perspectives and contributions of individuals by fostering a culture of openness, inclusivity and belonging.
We continually set the bar higher for ourselves by encouraging and embracing innovative thinking, crafting an environment where new ideas are valued, and growth opportunities and continuous improvement are cultivated. Respect: We treat everyone with dignity and consideration, acknowledging the diverse perspectives and contributions of individuals by fostering a culture of openness, inclusion and belonging.
While outdoor cultivation is almost exclusively extraction grade, its presence in the market will have a negative effect on pricing of extraction grade wholesale cannabis. As of May 31, 2024, Health Canada has issued approximately 1,000 active licenses to cannabis cultivators, processors and sellers. Health Canada licenses are limited to individual properties.
While outdoor cultivation is almost exclusively extraction grade, its presence in the market will have a negative effect on pricing of extraction grade wholesale cannabis. As of May 31, 2025, Health Canada has issued approximately 1,000 active licenses to cannabis cultivators, processors and sellers. Health Canada licenses are limited to individual properties.
Breckenridge Brewery has two locations to visit – the original brewpub in Breckenridge and its renowned Farm House restaurant in Littleton, CO, outside Denver.
Today. Breckenridge Brewery has two locations to visit – the original brewpub in Breckenridge and its renowned Farm House restaurant in Littleton, CO, outside Denver.
Developments affecting production sites, including at our breweries or our distillery in Breckenridge, could negatively impact financial results for our beverage alcohol business segment.
Developments affecting production sites, including at our breweries or our distillery in Breckenridge, could negatively impact financial results for our beverage business segment.
Our Manitoba Harvest business is a leader in the hemp-based food category. Our core values drive our performance and guide our pursuits: Creativity: We find solutions to challenges by exploring all options, and by leveraging the collective ingenuity of our teams, internal fortitude, and by putting the consumers’ needs first.
Our Manitoba Harvest business is a leader in the hemp-based food category in the U.S. Our core values drive our performance and guide our pursuits: Creativity: We find solutions to challenges by exploring all options, and by leveraging the collective ingenuity of our teams, internal fortitude, and by putting the consumers’ needs first.
However, our Canadian net operating loss carry-forwards begin to expire in 2028, and limited carryforward periods also exist in other jurisdictions. As a result, we may not be able realize the full benefit of our net operating loss carryforwards in Canada and other jurisdictions, which could result in increased future tax liability to us.
However, our Canadian net operating loss carryforwards begin to expire in 2028, and limited carryforward periods also exist in other jurisdictions. As a result, we may not be able realize the full benefit of our net operating loss carryforwards in Canada and other jurisdictions, which could result in increased future tax liability to us.
See also Risk Factor “ Our vape business is subject to uncertainty in the evolving vape market due to negative public sentiment and regulatory scrutiny. ” Previously unknown adverse reactions resulting from human consumption of cannabis or beverage alcohol products alone or in combination with other medications or substances could also occur. 27 In addition, the manufacture and sale of our products, like the manufacture and sale of any ingested product, involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
See also Risk Factor “ Our vape business is subject to uncertainty in the evolving vape market due to negative public sentiment and regulatory scrutiny. ” Previously unknown adverse reactions resulting from human consumption of cannabis or beverage products alone or in combination with other medications or substances could also occur. 26 In addition, the manufacture and sale of our products, like the manufacture and sale of any ingested product, involves a risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors. 34 Our stockholders may be subject to dilution resulting from future offerings of common stock by us. We may raise additional funds in the future by issuing common stock or equity-linked securities.
Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors. 33 Our stockholders may be subject to dilution resulting from future offerings of common stock by us. We may raise additional funds in the future by issuing common stock or equity-linked securities.
Distribution Segment Our Business CC Pharma GmbH was founded in 1999 and is today one of the leading drug importers in Germany. It specializes in the re-importation and parallel importation of European pharmaceuticals, providing the healthcare market with branded medicines in a more cost-effective manner.
Distribution Segment Our Business CC Pharma GmbH (“CC Pharma”) was founded in 1999 and is today one of the leading drug importers in Germany. It specializes in the re-importation and parallel importation of European pharmaceuticals, providing the healthcare market with branded medicines in a more cost-effective manner.
If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease and our ability to raise capital, expand our business or continue our operations may be impaired. 22 We are exposed to risks relating to the laws of various countries as a result of our international operations.
If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease and our ability to raise capital, expand our business or continue our operations may be impaired. 21 We are exposed to risks relating to the laws of various countries as a result of our international operations.
We may be materially adversely affected by negative impacts on the global economy, capital markets or other geopolitical conditions resulting from the ongoing conflict between Israel and Hamas and other terrorist organizations, the invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and other negative impacts on the global economy.
We may be materially adversely affected by negative impacts on the global economy, capital markets or other geopolitical conditions resulting from the ongoing conflict between Israel and Iran and other terrorist organizations, the invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and other negative impacts on the global economy.
The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, as well as the ongoing conflict between Israel and Hamas, have created global security concerns that could have a lasting impact on regional and global economies.
The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, as well as the ongoing conflict between Israel and Iran, have created global security concerns that could have a lasting impact on regional and global economies.
Reportable Segments Our business consists of four reporting segments, which are defined by the industry in which we compete, target consumer and need, route to market, and margins. This enables us to track and measure our performance and build processes for repeatable success in each of these categories.
Reportable Segments Our business consists of four reporting segments, which are defined by the industry in which we compete, target consumers and need, route to market, and margins. This enables us to track and measure our performance and build processes for repeatable success in each of these categories.
Regulatory Environment United States Regulation of Hemp-Based CBD & THC Hemp products are subject to state and federal regulation in respect to the production, distribution and sale of products intended for human ingestion or topical application. Hemp is categorized as Cannabis sativa L., a subspecies of the cannabis genus.
Regulatory Environment United States Regulation of Hemp-Based CBD & THC Hemp products are subject to state and federal regulation with respect to the production, distribution and sale of products intended for human ingestion or topical application. Hemp is categorized as Cannabis sativa L., a subspecies of the cannabis genus.
As of May 31, 2024, 6,209,000 warrants remain outstanding and do not expire until September 17, 2025.
As of May 31, 2025, 6,209,000 warrants remain outstanding and do not expire until September 17, 2025.
Because a significant portion of our sales are generated in Canada and other countries outside the United States, fluctuations in foreign currency exchange rates could harm our results of operations. The reporting currency for our financial statements is the United States dollar.
Since a significant portion of our sales are generated in Canada and other countries outside the United States, fluctuations in foreign currency exchange rates could harm our results of operations. The reporting currency for our financial statements is the United States dollar.
Kennedy International Airport and Long Island MacArthur Airport in Long Island, New York, Hartsfield-Jackson Atlanta International Airport, and Denver International Airport, and partnerships with the New York Mets, Denver Nuggets, Atlanta United, University of Florida, the Portland Timbers, University of Colorado, Denver state and University of Washington among others.
Kennedy International Airport and Long Island MacArthur Airport in Long Island, New York, Hartsfield-Jackson Atlanta International Airport, and Denver International Airport, and partnerships with the New York Mets, Denver Nuggets, Atlanta United, University of Florida, the Portland Timbers, University of Colorado, University of Denver, University of Oregon and University of Washington among others.
We issued various securities convertible into shares of our common stock, or Convertible Securities. Holders of certain Convertible Securities have the right to require us to repurchase their Convertible Securities upon the occurrence of a fundamental change.
We issued various securities convertible into shares of our common stock, or “Convertible Securities”. Holders of certain Convertible Securities have the right to require us to repurchase their Convertible Securities upon the occurrence of a fundamental change.
With a focus on balanced, approachable, and interesting beer, the brewery’s portfolio includes Avalanche Amber Ale, Palisade Peach Wheat, Juice Drop Hazy IPA, Funslinger Lager, Vanilla Porter, Hop Peak IPA, Juice Drop Imperial Hazy IPA, Strawberry Sky, Mountain Beach Session Sour, Agave Wheat, Palisade Peach Light, Nitro Vanilla Porter, Nitro Irish Stout, and Christmas Ale (seasonal).
With a focus on balanced, approachable, and interesting beer, the brewery’s portfolio includes Avalanche Amber Ale, Palisade Peach Wheat, Juice Drop Hazy IPA, Funslinger Lager, Vanilla Porter, Juice Drop Imperial Hazy IPA, Strawberry Sky, Mountain Beach Session Sour, Agave Wheat, Palisade Peach, Nitro Vanilla Porter, Nitro Irish Stout, and Christmas Ale (seasonal).
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. 33 We may not have the ability to raise the funds necessary to settle conversions of the Convertible Securities in cash or to repurchase the Convertible Securities upon a fundamental change.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. 32 Risks Related to our Convertible Securities We may not have the ability to raise the funds necessary to settle conversions of the Convertible Securities in cash or to repurchase the Convertible Securities upon a fundamental change.
We also bring experience in the pharmacy market – especially in the areas of infrastructure, international logistics, distribution and regulatory requirements. 13 Regulatory Environment Reliable quality assurance is a top priority at CC Pharma. The basis of our quality management are the legal regulations, especially the GDP and GMP guidelines.
We also bring experience in the pharmacy market – especially in the areas of infrastructure, international logistics, distribution and regulatory requirements. 13 Regulatory Environment Stringent quality control and assurance are a top priority at CC Pharma. The basis of our quality management is the legal regulations, especially the GDP and GMP guidelines.
On March 13, 2020, we entered into an underwriting agreement with Canaccord Genuity LLC relating to the issuance and sale of shares of our common stock at a price to the public of $4.76 per share and included warrants to purchase additional common stock at a price of $4.7599 per warrant.
On March 13, 2020, we entered into an underwriting agreement with Canaccord Genuity LLC relating to the issuance and sale of shares of our common stock at a price to the public of $4.76 per share and included warrants to purchase additional common stock at a price of $5.95 per warrant.
Through our various subsidiaries and partnerships with distributors, our medical products are available to patients on 5 continents, which include the following international distribution channels: • CC Pharma, our wholly-owned subsidiary, is a leading importer and distributor of pharmaceuticals for the German market and we are leveraging its distribution network in Germany for medical cannabis. • Our products are also distributed by multiple wholesalers and directly to pharmacies in Germany. • In Argentina, ABP, S.A., our wholly-owned subsidiary, distributes medical cannabis throughout Argentina under the Argentinian “Compassionate Use” national law, which allows patients with refractory epilepsy, holding a medical prescription from a neurologist, to apply for special access to imported medical cannabis products.
Through our various distribution subsidiaries and partnerships with distributors, our medical products are available to patients on 5 continents, which include the following international distribution channels: • CC Pharma, our wholly-owned subsidiary, is a leading importer and distributor of pharmaceuticals for the German market and we are leveraging its distribution network in Germany for medical cannabis. • In Italy, FL Group, our wholly-owned subsidiary, distributes medical cannabis throughout Italy. • In Argentina, ABP, S.A., our wholly-owned subsidiary, distributes medical cannabis throughout Argentina under the Argentinian “Compassionate Use” national law, which allows patients with refractory epilepsy, holding a medical prescription from a neurologist, to apply for special access to imported medical cannabis products. • Our products are also distributed by multiple wholesalers and directly to pharmacies in various countries throughout Europe and in Australia.
We continue to conduct extensive research and development activities and develop and promote new products for medical use. Our Adult-Use Cannabis Brands We believe that our portfolio of brands, developed for consumers across broad demographics and targeted segments, remains unmatched in the industry.
We continue to conduct extensive research and development activities in order to innovate and develop new products for medical use. Our Adult-Use Cannabis Brands We believe that our portfolio of brands, developed for consumers across broad demographics and targeted segments, remains unmatched in the industry.
This approach has permitted us to maintain a strong, flexible balance sheet, cash balance and access to capital, which we believe will assist us to accelerate growth and deliver long-term sustainable value for our stockholders.
This approach has permitted us to maintain a strong, flexible balance sheet, cash balance and access to capital, which we believe will assist us in accelerating growth and deliver long-term sustainable value for our stockholders.
At Tilray, we recognize that our people are our greatest asset, and we strive to create a workplace that fosters their growth, development, and wellbeing. As of May 31, 2024, we have approximately 2,650 employees worldwide. We consider relations with our employees to be good and have never experienced work stoppages.
At Tilray, we recognize that our people are our greatest asset, and we strive to create a workplace that fosters their growth, development, and wellbeing. As of May 31, 2025, we have approximately 2,842 employees worldwide. We consider relations with our employees to be good and have never experienced work stoppages.
We will continue to invest in innovation in order to continue to provide our patients and consumers with a differentiated portfolio of products that exceeds their expectations and meets their needs. • Grow and leverage our investment in beverage and hemp-based food .
We will continue to invest in innovation in order to continue to provide our patients and consumers with a differentiated portfolio of products that exceeds their expectations and meets their needs, driven by research and insights. • Grow and leverage our investment in beverage and hemp-based food .
As such, if a licensed producer seeks to commence production at a new site, it must apply to Health Canada for a new license. As of May 31, 2024, approximately 3,615 authorized retail cannabis stores have opened across Canada.
As such, if a licensed producer seeks to commence production at a new site, it must apply to Health Canada for a new license. As of May 31, 2025, approximately 3,700 authorized retail cannabis stores have opened across Canada.
Wellness Segment Our Brands and Products Our Tilray Wellness segment primarily consists of the Manitoba Harvest branded hemp-based food business, which develops, manufactures, markets and distributes a diverse portfolio of hemp-based food and wellness products under various brands, which include Manitoba Harvest, Hemp Yeah!, and Just Hemp Foods.
Wellness Segment Our Brands and Products Our Tilray Wellness segment primarily consists of the Manitoba Harvest branded hemp-based food business, which develops, manufactures, markets and distributes a diverse portfolio of hemp-based food and wellness products under various brands, which include Manitoba Harvest, Hemp Yeah!, Just Hemp Foods and The Humble Seed cracker company.
Our medical cannabis brands consist of: • Tilray® - The Tilray brand is a medical cannabis brand designed for prescribers and patients in the global medical market by offering a wide range of consistent high-quality, pharmaceutical-grade medical cannabis and cannabinoid-based products.
Our medical cannabis brands consist of: • Tilray Medical® - The Tilray Medical brand was designed for prescribers and patients in the global medical market and is well-known for offering a wide range of consistent high-quality, pharmaceutical-grade medical cannabis and cannabinoid-based products.
Growers of cannabis and retailers operating in the illicit market continue to hold significant market share in Canada and are effectively competitors to our business. Illicit market participants divert customers away through product offering, price point, anonymity and convenience.
Growers of cannabis and retailers operating in the illicit market continue to hold significant market share in Canada and are effectively competitors to our business. Illicit market participants divert consumers away through product offerings, price point, anonymity and convenience.
Health Canada has issued hundreds of licenses for Licensed Producers. The number of licenses granted and the number of Licensed Producers ultimately authorized by Health Canada could have an adverse impact on our ability to compete for market share in Canada.
Health Canada has issued approximately a thousand licenses for Licensed Producers. The number of licenses granted and the number of Licensed Producers ultimately authorized by Health Canada could have an adverse impact on our ability to compete for market share in Canada.
Risks Related to Ownership of Our Securities The price of our common stock in public markets has experienced and may continue to experience severe volatility and fluctuations. The market price for our common stock, and the market price of stock of other companies operating in the cannabis industry, has been extremely volatile.
The price of our common stock in public markets has experienced and may continue to experience severe volatility and fluctuations. The market price for our common stock, and the market price of stock of other companies operating in the cannabis industry, has been extremely volatile.
(“High Park”), we maintain supply agreements for adult-use cannabis with all the provinces and territories in Canada. Tilray is party to a distribution agreements with Great North Distributors and Northern Elements to provide sales force and wholesale/retail channel expertise required to efficiently distribute our adult-use products through each of the provincial/territorial cannabis control agencies, excluding Quebec.
(“High Park”), we maintain supply agreements for adult-use cannabis with all the provinces and territories in Canada. Tilray is party to a distribution agreement with Great North Distributors to provide sales force and wholesale/retail channel expertise required to efficiently distribute our adult-use products through each of the provincial/territorial cannabis control agencies, excluding Quebec where we utilize internal resources.
Our brands can also be found aboard all Delta Airline Flights nationwide and internationally. Additionally, the Company has developed a strong international presence with our craft beers and spirits being distributed across Europe, Asia and Australia as well as and aboard international cruise lines.
Our brands can also be found aboard all Delta Air Lines flights nationwide and internationally. Additionally, the Company has developed an international presence with our craft beers and spirits being distributed across Europe, Asia and Australia as well as aboard international cruise lines.
Breckenridge and our other craft beverage brands portfolio each face substantial competition in the beer industry and the broader market for alcoholic beverage products which could impact our business and financial results.
Sweetwater, Breckenridge, Montauk and our other recently-acquired craft beverage brands portfolio each face substantial competition in the beer industry and the broader market for alcoholic beverage products, which could impact our business and financial results.
See “ Use of Non-GAAP Measures – Constant Currency Presentation ” for a discussion of these Non-GAAP Measures. Beverage Segment Our Brands and Products We are a major player in the craft alcohol and beverage business through our evolving portfolio and are the 5th largest craft brewery in the United States according to the Brewers Association.
See “ Use of Non-GAAP Measures – Constant Currency Presentation ” for a discussion of these Non-GAAP Measures. Beverage Segment Our Brands and Products We are a major player in the craft beverage business through our evolving portfolio and are the 4th largest craft brewery in the United States according to the Brewers Association 2024 U.S.
The increase in the number and availability of competing products and brands, the costs to compete and potential decrease in distribution support and opportunities may adversely affect our business and financial results. 21 Breckenridge and our other craft beverage brands portfolio are each dependent on distributors to deliver sustained growth and distribute products.
The increase in the number and availability of competing products and brands, the costs to compete and potential decrease in distribution support and opportunities may adversely affect our business and financial results. 20 Sweetwater, Breckenridge, Montauk and our other recently-acquired craft beverage brands portfolio are each dependent on distributors to deliver sustained growth and distribute products.
Aside from our Portugal and Portland Oregon employees from the recent acquisition of Craft Brand, none of our employees are represented by labor unions or are subject to collective bargaining agreements.
Aside from certain of our Cantanhede, Portugal and Portland Oregon employees from the initial Craft Brand acquisition, none of our employees are represented by labor unions or are subject to collective bargaining agreements.
The Company also operates in the craft spirits businesses through Breckenridge Distillery, which was founded in 2008 as a small craft spirits brand in Breckenridge, Colorado but has since grown its award-winning bourbon whiskey collection and innovative craft spirits portfolio to be distributed in all 50 states in addition to owning two tasting rooms/retail shops and a world class restaurant.
The Company also operates in the craft spirits businesses through Breckenridge Distillery, which was founded in 2008 in Breckenridge, Colorado and has grown its award-winning bourbon whiskey collection and innovative craft spirits portfolio to be distributed in all 50 states in addition to operating two tasting rooms/retail shops and a world class restaurant.
Its product portfolio includes Toasted Lager, Hoptical Illusion, Imperial Sunshine, as well as a rotating line of Innovation Beers.
Its product portfolio includes Toasted Lager, Long Island Light, Imperial Sunshine, Hoptical Illusion as well as a rotating line of Innovation Beers.
Any reduction in or impairment of the value of goodwill, intangible assets and long-lived assets will result in a charge against earnings, which could have a material adverse impact on our reported financial results. We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future.
Any additional reductions in or impairments of the value of goodwill, intangible assets and long-lived assets will result in an additional charge against earnings, which would have a material adverse impact on our reported financial results. We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future.
Additionally, any escalation of military actions and sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. 36 Any of the above mentioned activities, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and the Hamas attack on Israel, could adversely affect our business.
Additionally, any escalation of military actions and sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. 35 Any of the above mentioned activities, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and the Israeli war with Iran, could adversely affect our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe increase in revenue for the year was driven by strong organic growth within our branded hemp business related to higher consumption. 53 Gross profit and gross margin Our gross profit and gross margin for the years ended May 31, 2024, 2023 and 2022, is as follows, for our each of our operating segments: (in thousands of U.S. dollars) For the year ended May 31, Change % Change Change % Change Beverage alcohol 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net revenue $ 202,094 $ 95,093 $ 71,492 $ 107,001 113 % $ 23,601 33 % Cost of goods sold 113,522 48,770 32,033 64,752 133 % 16,737 52 % Gross profit 88,572 46,323 39,459 42,249 91 % 6,864 17 % Gross margin 44 % 49 % 55 % (5 )% (10 )% (6 )% (11 )% Purchase price accounting step-up 4,602 4,482 2,214 120 3 % 2,268 102 % Adjusted gross profit (1) 93,174 50,805 41,673 42,369 83 % 9,132 22 % Adjusted gross margin (1) 46 % 53 % 58 % (7 %) (13 %) (5 %) (9 %) Cannabis Net revenue 272,798 220,430 237,522 52,368 24 % (17,092 ) (7 )% Cost of goods sold 182,594 162,755 194,834 19,839 12 % (32,079 ) (16 )% Gross profit 90,204 57,675 42,688 32,529 56 % 14,987 35 % Gross margin 33 % 26 % 18 % 7 % 27 % 8 % 44 % Purchase price accounting step-up 7,628 — — 7,628 NM — — Inventory valuation adjustments — 55,000 59,500 (55,000 ) (100 )% (4,500 ) (8 )% Adjusted gross profit (1) 97,832 112,675 102,188 (14,843 ) (13 )% 10,487 10 % Adjusted gross margin (1) 36 % 51 % 43 % (15 )% (29 )% 8 % 19 % Distribution Net revenue 258,740 258,770 259,747 (30 ) (0 )% (977 ) (0 )% Cost of goods sold 230,596 231,309 243,231 (713 ) (0 )% (11,922 ) (5 )% Gross profit 28,144 27,461 16,516 683 2 % 10,945 66 % Gross margin 11 % 11 % 6 % 0 % 0 % 5 % 83 % Inventory valuation adjustments — — 7,500 — NM (7,500 ) (100 %) Adjusted gross profit (1) 28,144 27,461 24,016 683 2 % 3,445 14 % Adjusted gross margin (1) 11 % 11 % 9 % 0 % 0 % 2 % 22 % Wellness Net revenue 55,310 52,831 59,611 2,479 5 % (6,780 ) (11 )% Cost of goods sold 38,879 37,330 41,457 1,549 4 % (4,127 ) (10 )% Gross profit 16,431 15,501 18,154 930 6 % (2,653 ) (15 )% Gross margin 30 % 29 % 30 % 1 % 3 % (1 )% (3 )% Total Net revenue 788,942 627,124 628,372 161,818 26 % (1,248 ) (0 )% Cost of goods sold 565,591 480,164 511,555 85,427 18 % (31,391 ) (6 )% Gross profit 223,351 146,960 116,817 76,391 52 % 30,143 26 % Gross margin 28 % 23 % 19 % 5 % 22 % 4 % 21 % Inventory valuation adjustments — 55,000 67,000 (55,000 ) (100 )% (12,000 ) (18 )% Purchase price accounting step-up 12,230 4,482 2,214 7,748 173 % 2,268 102 % Adjusted gross profit (1) 235,581 206,442 186,031 29,139 14 % 20,411 11 % Adjusted gross margin (1) 30 % 33 % 30 % (3 )% (9 )% 3 % 10 % 54 (1) Adjusted gross profit is our Gross profit (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and adjusted gross margin is our Gross margin (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and are non-GAAP financial measures.
Biggest changeThe increase in net revenue was primarily attributed to our strategic focus on expanding our product range, including the relaunch of HiBall energy drinks and organic growth within our branded hemp food business related to higher consumption. 52 Gross profit and gross margin Our gross profit and gross margin for the fiscal years ended May 31, 2025, 2024 and 2023 were as follows for our each of our operating segments: (in thousands of U.S. dollars) For the year ended May 31, Change % Change Change % Change Beverage 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net revenue $ 240,595 $ 202,094 $ 95,093 $ 38,501 19 % $ 107,001 113 % Cost of goods sold 147,591 113,522 48,770 34,069 30 % 64,752 133 % Gross profit 93,004 88,572 46,323 4,432 5 % 42,249 91 % Gross margin 39 % 44 % 49 % (5 )% (11 )% (5 )% (10 )% Purchase price accounting step-up 1,610 4,602 4,482 (2,992 ) (65 )% 120 3 % Adjusted gross profit (1) 94,614 93,174 50,805 1,440 2 % 42,369 83 % Adjusted gross margin (1) 39 % 46 % 53 % (7 )% (15 )% (7 )% (13 )% Cannabis Net revenue 249,001 272,798 220,430 (23,797 ) (9 )% 52,368 24 % Cost of goods sold 150,005 182,594 162,755 (32,589 ) (18 )% 19,839 12 % Gross profit 98,996 90,204 57,675 8,792 10 % 32,529 56 % Gross margin 40 % 33 % 26 % 7 % 21 % 7 % 27 % Purchase price accounting step-up — 7,628 — (7,628 ) (100 )% 7,628 — Inventory valuation adjustments — — 55,000 — NM (55,000 ) (100 )% Adjusted gross profit (1) 98,996 97,832 112,675 1,164 1 % (14,843 ) (13 )% Adjusted gross margin (1) 40 % 36 % 51 % 4 % 11 % (15 )% (29 )% Distribution Net revenue 271,228 258,740 258,770 12,488 5 % (30 ) (0 )% Cost of goods sold 241,896 230,596 231,309 11,300 5 % (713 ) (0 )% Gross profit 29,332 28,144 27,461 1,188 4 % 683 2 % Gross margin 11 % 11 % 11 % 0 % 0 % 0 % 0 % Wellness Net revenue 60,485 55,310 52,831 5,175 9 % 2,479 5 % Cost of goods sold 41,247 38,879 37,330 2,368 6 % 1,549 4 % Gross profit 19,238 16,431 15,501 2,807 17 % 930 6 % Gross margin 32 % 30 % 29 % 2 % 7 % 1 % 3 % Total Net revenue 821,309 788,942 627,124 32,367 4 % 161,818 26 % Cost of goods sold 580,739 565,591 480,164 15,148 3 % 85,427 18 % Gross profit 240,570 223,351 146,960 17,219 8 % 76,391 52 % Gross margin 29 % 28 % 23 % 1 % 4 % 5 % 22 % Inventory valuation adjustments — — 55,000 — 0 % (55,000 ) (100 )% Purchase price accounting step-up 1,610 12,230 4,482 (10,620 ) (87 )% 7,748 173 % Adjusted gross profit (1) 242,180 235,581 206,442 6,599 3 % 29,139 14 % Adjusted gross margin (1) 29 % 30 % 33 % (1 )% (3 )% (3 )% (9 )% 53 (1) Adjusted gross profit is our Gross profit (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and adjusted gross margin is our Gross margin (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and are non-GAAP financial measures.
In order to ensure the long-term sustainable growth of our Company, we continue to focus on developing strong capabilities in data analytics and consumer insights in order to drive category management leadership and assess opportunities for the introduction of new categories, products and entries into new geographies.
In order to ensure the long-term sustainable growth of our Company, we continue to focus on developing strong capabilities in data analytics and consumer insights, drive category management leadership and assess opportunities for the introduction of new categories, products and entries into new geographies.
While we continue to execute against our strategic initiatives that we believe will result in the long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to enter attractive new geographic markets and product categories as well as expand our existing capabilities.
While we continue to execute against our strategic initiatives that we believe will result in long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to enter attractive new geographic markets and product categories as well as expand our existing capabilities.
Fair value of assets acquired and liabilities assumed is typically estimated using an income approach, which is based on the present value of future discounted cash flows. Significant estimates in the discounted cash flow model include the discount rate, rate of future revenue growth and profitability of the acquired business and working capital effects.
Fair value of assets acquired and liabilities assumed are typically estimated using an income approach, which is based on the present value of future discounted cash flows. Significant estimates in the discounted cash flow model include the discount rate, rate of future revenue growth and profitability of the acquired business and working capital effects.
As a result, we incur transaction costs in connection with identifying and completing acquisitions and strategic transactions, as well as ongoing integration costs as we combine acquired companies and continue to achieve synergies, which is offset by income generated in connection with the execution of these transactions.
As a result, we incur transaction costs in connection with identifying and completing acquisitions and strategic transactions, as well as ongoing integration and restructuring costs as we combine acquired companies and continue to achieve synergies, which is offset by income generated in connection with the execution of these transactions.
As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
As a result, the foreign currency impact is equal to the current year’s results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
Reconciliation of Non-GAAP Financial Measures to GAAP Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that does not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.
Reconciliation of Non-GAAP Financial Measures to GAAP Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that does not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.
The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its short-term liquidity position by combing these two GAAP metrics. 49 Operating Metrics and Non-GAAP Measures We use the operating metrics and non-GAAP measures set forth in the table below to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions.
The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its short-term liquidity position by combing these two GAAP metrics. 48 Operating Metrics and Non-GAAP Measures We use the operating metrics and non-GAAP measures set forth in the table below to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions.
Adjusted gross profit is our Gross profit (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and adjusted gross margin is our Gross margin (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and are non-GAAP financial measures.
Adjusted gross profit is our Gross profit (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and adjusted gross margin is our Gross margin (adjusted to exclude inventory valuation adjustment and purchase price accounting valuation step-up) and are both non-GAAP financial measures.
We do not consider adjusted gross profit and adjusted gross margin percentage in isolation or as an alternative to financial measures determined in accordance with GAAP. 62 Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We do not consider adjusted gross profit and adjusted gross margin percentage in isolation or as an alternative to financial measures determined in accordance with GAAP. 61 Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Adjusted gross profit is our Gross profit (adjusted to exclude purchase price accounting valuation step-up) and adjusted gross margin is our Gross margin (adjusted to exclude purchase price accounting valuation step-up) and are non-GAAP financial measures.
Adjusted gross profit is our Gross profit, adjusted to exclude purchase price accounting valuation step-up and adjusted gross margin is our Gross margin, adjusted to exclude purchase price accounting valuation step-up. Both are non-GAAP financial measures.
Changes in the regulatory structure, lack of retail distribution locations or lack of consumer demand could result in future inventory reserves. 63 (iii) Impairment of goodwill and indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred.
Changes in the regulatory structure, lack of retail distribution locations or lack of consumer demand could result in future inventory reserves. 62 (iii) Impairment of goodwill and indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred.
However, throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K, we discuss non-GAAP financial measures, including reference to: • adjusted gross profit (excluding purchase price allocation (“PPA”) step up and inventory valuation allowance) consolidated and for each reporting segment (Cannabis, Beverage alcohol, Distribution and Wellness), • adjusted gross margin (excluding (“PPA”) step up and inventory valuation allowance) consolidated and for each reporting segment (Cannabis, Beverage alcohol, Distribution and Wellness), • adjusted EBITDA, • cash and marketable securities, and • constant currency presentation of net revenue.
However, throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K, we discuss non-GAAP financial measures, including reference to: • adjusted gross profit (excluding purchase price allocation (“PPA”) step up and inventory valuation allowance) consolidated and for each reporting segment (Cannabis, Beverage, Distribution and Wellness), • adjusted gross margin (excluding PPA step up and inventory valuation allowance) consolidated and for each reporting segment (Cannabis, Beverage, Distribution and Wellness), • adjusted EBITDA, • cash and marketable securities, and • constant currency presentation of net revenue (by segment and consolidated).
Other companies, including companies in our industry, may calculate operating metrics and non-GAAP measures with similar names differently which may reduce their usefulness as comparative measures. Certain variances are labeled as not meaningful ("NM") throughout management's discussion and analysis.
Other companies, including companies in our industry, may calculate operating metrics and non-GAAP measures with similar names differently which may reduce their usefulness as comparative measures. Certain variances are labeled as not meaningful (“NM”) throughout management's discussion and analysis.
We believe that existing cash, cash equivalents, marketable securities and cash generated by operations, together with access to external sources of funds, will be sufficient to meet our domestic and foreign capital needs for a short and long term outlook. 65 For the Company's short-term liquidity requirements, we are focused on generating positive cash flows from operations and being free cash flow positive.
We believe that existing cash, cash equivalents, marketable securities and cash generated by operations, together with access to external sources of funds, will be sufficient to meet our domestic and foreign capital needs for the short and long term outlook. 64 For the Company's short-term liquidity requirements, we are focused on generating positive cash flows from operations and being free cash flow positive.
These measures are presented to help investors’ overall understanding of our financial performance and should not be considered in isolated or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
These measures are presented to help investors’ overall understanding of our financial performance and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Item 1A. Risk Factors ” and the financial information and the notes thereto included in Part II, Item 8 of this Form 10-K in this Annual Report for the fiscal year ended May 31, 2024 ( “ Annual Report ” ).
Item 1A. Risk Factors ” and the financial information and the notes thereto included in Part II, Item 8 of this Form 10-K in this Annual Report for the fiscal year ended May 31, 2025 ( “ Annual Report ” ).
We have identified certain policies and estimates as critical to our business operations and the understanding of our past or present results of operations related to (i) Revenue recognition, (ii) valuation of inventory (iii) impairment of goodwill and indefinite-lived intangible assets, (iv) business combinations and goodwill, (v) convertible notes receivable and (vi) convertible debentures.
We have identified certain policies and estimates as critical to our business operations and the understanding of our past or present results of operations related to (i) revenue recognition, (ii) valuation of inventory (iii) impairment of goodwill and indefinite-lived intangible assets, (iv) business combinations and goodwill, and (v) convertible debentures.
We believe that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition.
We believe that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to our results of operations and financial condition.
Unrealized gains or losses represent foreign exchange revaluation of foreign denominated monetary assets and liabilities; • Non-cash change in fair value of warrant liability; • Interest expense, net; • Costs incurred to start up new facilities, and to fund emerging market operations; • Transaction (income) costs, net, which includes acquisition related income and expenses, related legal, financial advisor and due diligence cost and expenses and transaction related compensation, which vary significantly by transaction and are excluded to evaluate ongoing operating results; • Restructuring charges; • Litigation costs, net of favorable recoveries and the third party fees associated with defending these claims, includes costs related to legacy and non-operational litigation matters, legal settlements and recoveries; • Amortization of purchase accounting fair value step-up in inventory value included in costs of goods sold; and • Current and deferred income tax expenses and recoveries, which could be a significant recurring expense or recovery in our business in the future and reduce or increase cash available to us.
Unrealized gains or losses represent foreign exchange revaluation of foreign denominated monetary assets and liabilities; • Non-cash change in fair value of warrant liability; • Interest expense, net; • Costs incurred to start up new facilities, and to fund emerging market operations; • Transaction (income) costs, net, which includes acquisition related income and expenses, related legal, financial advisor and due diligence cost and expenses and transaction related compensation, which vary significantly by transaction and are excluded to evaluate ongoing operating results; • Project 420 business optimization costs; • Loss (gain) on sale of capital assets - non-operating facility; • Restructuring charges; • Litigation costs, net of favorable recoveries and the third party fees associated with defending these claims, includes costs related to legacy and non-operational litigation matters, legal settlements and recoveries; • Amortization of purchase accounting fair value step-up in inventory value included in costs of goods sold; and • Current and deferred income tax expenses and recoveries, which could be a significant recurring expense or recovery in our business in the future and reduce or increase cash available to us.
On May 17, 2024, the Company entered into an equity distribution agreement with TD Securities (USA) LLC (“TD Securities”) and Jefferies LLC (“Jefferies”) in connection with an aggregate offering value of up to $250 million from time to time through an at-the-market equity program (“ATM Program”).
On May 17, 2024, the Company entered into an equity distribution agreement with TD Securities (USA) LLC and Jefferies LLC in connection with an aggregate offering value of up to $250 million through an at-the-market equity program (“ATM Program”).
The MedCanG provides for several important medical cannabis reforms including the abolishment of the tender for domestic production, which is being replaced with a regular licensing scheme under the authority of the Federal Institute for Drugs and Medical Devices (the “BfArM”) as well as for the reclassification of medical cannabis from a narcotic to non-narcotic.
The MedCanG provides for several important medical cannabis reforms including the reclassification of medical cannabis from a narcotic to non-narcotic and the abolishment of the tender for domestic production, which has been replaced with a regular licensing scheme under the authority of the Federal Institute for Drugs and Medical Devices (the “BfArM”).
Cash resources and working capital requirements The Company constantly monitors and manages its cash flows to assess the liquidity necessary to fund operations. As of May 31, 2024, the Company maintained $260.5 million of cash and cash equivalents on hand and marketable securities, compared to $448.5 million in cash and cash equivalents at May 31, 2023.
Cash resources and working capital requirements The Company constantly monitors and manages its cash flows to assess the liquidity necessary to fund operations. As of May 31, 2025, the Company maintained $256.4 million of cash and cash equivalents on hand and marketable securities, compared to $260.5 million in cash and cash equivalents as of May 31, 2024.
Working capital provides funds for the Company to meet its operational and capital requirements. As of May 31, 2024, the Company maintained working capital of $378.5 million. We historically financed our operations through the issuance of common stock, sale of convertible notes and revenue generating activities.
Working capital provides funds for the Company to meet its operational and capital requirements. As of May 31, 2025, the Company maintained working capital of $408.3 million. We historically financed our operations through the issuance of common stock, sale of convertible notes and revenue generating activities.
The Company’s management believes that adjusted gross profit and adjusted gross margin are useful to our management to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions.
The Company’s management believes that adjusted gross profit and adjusted gross margin are useful to our management to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions without the impacts of the aforementioned adjusted items.
The Company calculates adjusted EBITDA as net loss/net income before income taxes, net interest expense, depreciation and amortization, equity in net loss of equity-method investees, purchase price accounting step-up on inventory, stock-based compensation, inventory valuation adjustments, impairments, other than temporary change in fair value of convertible notes receivable, restructuring costs, transaction (income) costs, net, litigation costs net of recoveries, change in fair value of contingent consideration, unrealized currency gains and losses and other adjustments.
The Company calculates adjusted EBITDA as net loss/net income before income taxes, net interest expense, depreciation and amortization, equity in net loss of equity-method investees, purchase price accounting step-up on inventory, stock-based compensation, inventory valuation adjustments, impairments, other than temporary change in fair value of convertible notes receivable, Project 420 business optimization, loss (gain) on sale of capital assets - non-operating facility, restructuring costs, transaction (income) costs, net, litigation costs net of recoveries, change in fair value of contingent consideration, unrealized currency gains and losses and other adjustments.
See “ Use of Non-GAAP Measures – Constant Currency Presentation ” above for a discussion of these Non-GAAP Measures. 52 Revenue from medical cannabis: Revenue from Canadian medical cannabis increased 1% to $25.2 million for the fiscal year ended May 31, 2024 , compared to revenue of $25.0 million for the fiscal year ended May 31, 2023.
See “ Use of Non-GAAP Measures – Constant Currency Presentation ” above for a discussion of these Non-GAAP Measures. 51 Revenue from medical cannabis: Gross revenue from Canadian medical cannabis decreased 1% to $25.0 million for the fiscal year ended May 31, 2025 , compared to gross revenue of $25.2 million for the fiscal year ended May 31, 2024.
Research and development costs relate to external costs associated with the development of new products. 57 Change in fair value of contingent consideration The Company measures contingent consideration at fair value classified as Level 3, as discussed in Note 29 (Financial risk management and financial instruments).
These relate to external costs incurred in connection with the development of new products. 56 Change in fair value of contingent consideration The Company measures contingent consideration at fair value classified as Level 3, as discussed in Note 29 (Financial risk management and financial instruments).
We do not consider adjusted gross profit and adjusted gross margin percentage in isolation or as an alternative to financial measures determined in accordance with GAAP. Beverage alcohol gross margin: Gross margin of 44% for the year ended May 31, 2024, decreased from 49% the prior year ended May 31, 2023.
We do not consider adjusted gross profit and adjusted gross margin percentage in isolation or as an alternative to financial measures determined in accordance with GAAP. Beverage gross margin: Gross margin of 39% for the fiscal year ended May 31, 2025 decreased from 44% when compared to the fiscal year ended May 31, 2024.
Litigation costs include fees and expenses incurred in connection with defending and settling ongoing legacy inherited litigation matters, net of any judgments or settlement recoveries received from third parties.
Litigation costs include fees and expenses incurred in connection with defending and settling ongoing legacy inherited litigation matters, net of any judgments or settlement recoveries received from third parties. See Note 28 (Commitments and contingencies) for additional details.
Included in other non-operating (losses) gains, net for the year ended May 31, 2024, are losses of $12.4 million, which is comprised of $2.3 million from the downside protection share issuance relating to the HTI note, as described in Note 19 (Stockholders' equity), $2.5 million of amounts to settle outstanding notes with non-controlling interest shareholders, $4.6 million for a decrease in value of equity investee, as described in Note 28 (Commitments and contingencies), Cannfections, and $3.1 million of loss on measurement at the lower of carrying amount and the fair value less costs to sell of Broken Coast's former Duncan facility refer to Note 6 (Capital assets).
The other non-operating (losses) gains, net for the fiscal year ended May 31, 2024 were $12.4 million and were mainly comprised of $2.3 million relating to the downside protection on the share issuance relating to the HTI note, $2.5 million to settle outstanding notes with non-controlling interest shareholders, $4.6 million related to the decrease in value of equity investee, Cannfections, and $3.1 million of loss on measurement at the lower of carrying amount and the fair value less costs to sell of Broken Coast’s former Duncan facility.
Other than temporary write-down of convertible notes receivable During the year ended May 31, 2024, the Company recognized an other-than-temporary change in fair value, which resulted in a non-cash impairment expense of convertible notes receivable of $42.7 million on the Medmen Convertible Notes Receivable compared to $117.8 million in the prior year ended May 31, 2023.
Other than temporary write-down of convertible notes receivable During the fiscal year ended May 31, 2025, the Company recognized an other-than-temporary change in fair value of convertible notes receivable, which resulted in a non-cash expense of $21.7 million compared to $42.7 million for the prior fiscal year period related to the MedMen Convertible Note.
The discount rate considers the relevant risk associated with the business-specific characteristics and the uncertainty related to the ability to achieve projected cash flows. These estimates and the resulting valuations require significant judgment. Management engages third party experts to assist in the valuation of material acquisitions.
The discount rate considers the relevant risk associated with the business-specific characteristics and the uncertainty related to the ability to achieve projected cash flows. These estimates and the resulting valuations require significant judgment.
The net proceeds from this offering are intended to fund strategic and accretive acquisitions or investments in businesses, including potential acquisitions of assets in the U.S. and internationally in order to capitalize on expected regulatory advancements or expansion opportunities.
The Company intends to use the net proceeds from the ATM Program to fund strategic and accretive acquisitions or investments in businesses and capital expenditures for acquired businesses, including potential acquisitions of assets in the U.S. and internationally in order to capitalize on expected regulatory advancements or expansion opportunities.
For the year ended May 31, (in thousands of U.S. dollars) 2024 2023 2022 Net beverage alcohol revenue $ 202,094 $ 95,093 $ 71,492 Net cannabis revenue 272,798 220,430 237,522 Distribution revenue 258,740 258,770 259,747 Wellness revenue 55,310 52,831 59,611 Beverage alcohol costs 113,522 48,770 32,033 Cannabis costs 182,594 162,755 194,834 Distribution costs 230,596 231,309 243,231 Wellness costs 38,879 37,330 41,457 Adjusted gross profit (excluding PPA step-up) (1) 235,581 206,442 186,031 Beverage alcohol adjusted gross margin (excluding PPA step-up) (1) 46 % 53 % 58 % Cannabis adjusted gross margin (excluding PPA step-up) (1) 36 % 51 % 43 % Distribution gross margin 11 % 11 % 9 % Wellness gross margin 30 % 29 % 30 % Adjusted EBITDA (1) $ 60,465 $ 58,679 $ 44,947 Cash and marketable securities (1) as at the year ended: 260,522 448,529 415,909 Working capital as at the year ended: $ 378,540 $ 340,050 $ 523,161 (1) Adjusted EBITDA, adjusted gross profit, adjusted gross margin for each of our segments are non-GAAP financial measures, and cash and marketable securities.
For the year ended May 31, (in thousands of U.S. dollars) 2025 2024 2023 Net beverage revenue $ 240,595 $ 202,094 $ 95,093 Net cannabis revenue 249,001 272,798 220,430 Distribution revenue 271,228 258,740 258,770 Wellness revenue 60,485 55,310 52,831 Beverage costs 147,591 113,522 48,770 Cannabis costs 150,005 182,594 162,755 Distribution costs 241,896 230,596 231,309 Wellness costs 41,247 38,879 37,330 Adjusted gross profit (excluding PPA step-up) (1) 242,180 235,581 206,442 Beverage adjusted gross margin (excluding PPA step-up) (1) 39 % 46 % 53 % Cannabis adjusted gross margin (excluding PPA step-up) (1) 40 % 36 % 51 % Distribution gross margin 11 % 11 % 11 % Wellness gross margin 32 % 30 % 29 % Adjusted EBITDA (1) $ 55,035 $ 60,465 $ 58,679 Cash and marketable securities (1) as at the year ended: 256,363 260,522 448,529 Working capital as at the year ended: $ 408,323 $ 378,540 $ 340,050 (1) Adjusted EBITDA, adjusted gross profit, adjusted gross margin for each of our segments are non-GAAP financial measures, and cash and marketable securities.
On a constant currency basis, given the change in the Euro and Argentine Peso against the U.S. Dollar in the quarter, revenue from Distribution was $259.7 million for the fiscal year ended May 31, 2024 when compared to prior year period.
Distribution revenue Net revenue from Distribution operations increased 5% to $271.2 million for the fiscal year ended May 31, 2025, compared to net revenue of $258.7 million for the prior fiscal year ended May 31, 2024. On a constant currency basis, given the change in the Euro and Argentine Peso against the U.S.
Wellness revenue Our Wellness revenue from Manitoba Harvest increased to $55.3 million for the fiscal year ended May 31, 2024 compared to $52.8 million for the prior year same period. On a constant currency basis for the fiscal year ended May 31, 2024, Wellness revenue increased to $55.5 million from $52.8 million.
Wellness revenue Our Wellness net revenue increased to $60.5 million for the fiscal year ended May 31, 2025 compared to $55.3 million for the fiscal year ended May 31, 2024. On a constant currency basis for the fiscal year ended May 31, 2025, Wellness net revenue increased to $61.4 million from $55.3 million.
The following table sets forth the major components of our statements of cash flows for the periods presented: For the year ended May 31, Change Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net cash provided by (used in) operating activities $ (30,905 ) $ 7,906 $ (177,262 ) $ (38,811 ) (491 )% $ 185,168 (104 )% Net cash provided by (used in) investing activities 128,349 (285,111 ) (21,533 ) 413,460 (145 )% (263,578 ) 1,224 % Net cash (used in) provided by financing activities (75,187 ) 70,158 128,196 (145,345 ) (207 )% (58,038 ) (45 )% Effect on cash of foreign currency translation (549 ) (2,230 ) (1,958 ) 1,681 (75 )% (272 ) 14 % Cash and cash equivalents, beginning of period 206,632 415,909 488,466 (209,277 ) (50 )% (72,557 ) (15 )% Cash and cash equivalents, end of period $ 228,340 $ 206,632 $ 415,909 $ 21,708 11 % $ (209,277 ) (50 )% Marketable securities 32,182 241,897 - (209,715 ) (87 )% 241,897 NM Cash and marketable securities (1) $ 260,522 $ 448,529 $ 415,909 $ (188,007 ) (42 )% $ 32,620 8 % (1) The cash and marketable securities presentation of our cash flows is a non-GAAP financial measure.
The following table sets forth the major components of our statements of cash flows for the periods presented: For the year ended May 31, Change Change 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net cash provided by (used in) operating activities $ (94,599 ) $ (30,905 ) $ 7,906 $ (63,694 ) 206 % $ (38,811 ) (491 )% Net cash provided by (used in) investing activities (46,718 ) 128,349 (285,111 ) (175,067 ) (136 )% 413,460 (145 )% Net cash (used in) provided by financing activities 133,506 (75,187 ) 70,158 208,693 (278 )% (145,345 ) (207 )% Effect on cash of foreign currency translation 1,137 (549 ) (2,230 ) 1,686 (307 )% 1,681 (75 )% Cash and cash equivalents, beginning of period 228,340 206,632 415,909 21,708 11 % (209,277 ) (50 )% Cash and cash equivalents, end of period $ 221,666 $ 228,340 $ 206,632 $ (6,674 ) (3 )% $ 21,708 11 % Marketable securities 34,697 32,182 241,897 2,515 8 % (209,715 ) (87 )% Cash and marketable securities(1) $ 256,363 $ 260,522 $ 448,529 $ (4,159 ) (2 )% $ (188,007 ) (42 )% (1) The cash and marketable securities presentation of our cash flows is a non-GAAP financial measure.
Wholesale cannabis revenue: Revenue from wholesale cannabis increased to $25.3 million for the fiscal year ended May 31, 2024, compared to revenue of $1.4 million for the prior year same period which is consistent on a constant currency basis.
International cannabis revenue: Net revenue from international cannabis increased 19% to $63.4 million for the fiscal year ended May 31, 2025, compared to net revenue of $53.3 million for the fiscal year ended May 31, 2024. On a constant currency basis, net revenue from international cannabis increased 19% to $63.2 million, compared to the prior year period.
Company Overview We are a leading global lifestyle consumer products company headquartered in Leamington and New York, with operations in Canada, the United States, Europe, Australia, New Zealand and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection. .
Company Overview Tilray Brands, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company”, “Tilray”, “we”, “us” and “our”) is a leading global lifestyle consumer products company, which was incorporated on January 24, 2018 and is headquartered in Leamington and New York, with operations in Canada, the United States, Europe, Australia and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection.
For the year ended May 31, Change Change Adjusted EBITDA reconciliation: 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net loss $ (222,404 ) $ (1,443,000 ) $ (434,132 ) $ 1,220,596 (85 )% $ (1,008,868 ) 232 % Income tax (recovery) expense (26,616 ) (7,181 ) (6,542 ) (19,435 ) 271 % (639 ) 10 % Interest expense, net 36,433 13,587 27,944 22,846 168 % (14,357 ) (51 )% Non-operating income (expense), net 37,842 66,909 (197,671 ) (29,067 ) (43 )% 264,580 (134 )% Amortization 126,913 130,149 154,592 (3,236 ) (2 )% (24,443 ) (16 )% Stock-based compensation 31,769 39,595 35,994 (7,826 ) (20 )% 3,601 10 % Change in fair value of contingent consideration (15,790 ) 855 (44,650 ) (16,645 ) (1,947 )% 45,505 (102 )% Impairments — 934,000 378,241 (934,000 ) (100 )% 555,759 147 % Other than temporary change in fair value of convertible notes receivable 42,681 246,330 — (203,649 ) (83 )% 246,330 NM Inventory valuation adjustments — 55,000 67,000 (55,000 ) (100 )% (12,000 ) (18 )% (Gain) loss on sale of capital assets - non-operating facility (3,987 ) — — (3,987 ) NM — NM Purchase price accounting step-up 12,230 4,482 2,214 7,748 173 % 2,268 102 % Facility start-up and closure costs 2,100 7,600 13,700 (5,500 ) (72 )% (6,100 ) (45 )% Litigation costs, net of recoveries 8,251 (505 ) 16,518 8,756 (1,734 )% (17,023 ) (103 )% Restructuring costs 15,581 9,245 795 6,336 69 % 8,450 1,063 % Transaction costs (income), net 15,462 1,613 30,944 13,849 859 % (29,331 ) (95 )% Adjusted EBITDA $ 60,465 $ 58,679 $ 44,947 $ 1,786 3 % $ 13,732 31 % 61 Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net loss.
For the year ended May 31, Change Change Adjusted EBITDA reconciliation: 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net loss $ (2,181,356 ) $ (222,404 ) $ (1,443,000 ) $ (1,958,952 ) 881 % $ 1,220,596 (85 )% Income tax (recovery) expense (121,017 ) (26,616 ) (7,181 ) (94,401 ) 355 % (19,435 ) 271 % Interest expense, net 29,952 36,433 13,587 (6,481 ) (18 )% 22,846 168 % Non-operating income (expense), net (10,284 ) 37,842 66,909 (48,126 ) (127 )% (29,067 ) (43 )% Amortization 133,490 126,913 130,149 6,577 5 % (3,236 ) (2 )% Stock-based compensation 24,289 31,769 39,595 (7,480 ) (24 )% (7,826 ) (20 )% Change in fair value of contingent consideration — (15,790 ) 855 15,790 (100 )% (16,645 ) (1,947 )% Impairment of intangible assets and goodwill 2,096,139 — 934,000 2,096,139 NM (934,000 ) (100 )% Other than temporary change in fair value of convertible notes receivable 21,661 42,681 246,330 (21,020 ) (49 )% (203,649 ) (83 )% Project 420 business optimization 2,600 — — 2,600 NM — NM Inventory valuation adjustments — — 55,000 — NM (55,000 ) (100 )% Loss (gain) on sale of capital assets - non-operating facility 1,787 (3,987 ) — 5,774 (145 )% (3,987 ) NM Purchase price accounting step-up 1,610 12,230 4,482 (10,620 ) (87 )% 7,748 173 % Facility start-up and closure costs — 2,100 7,600 (2,100 ) (100 )% (5,500 ) (72 )% Litigation costs, net of recoveries 17,347 8,251 (505 ) 9,096 110 % 8,756 (1,734 )% Restructuring costs 34,283 15,581 9,245 18,702 120 % 6,336 69 % Transaction costs (income), net 4,534 15,462 1,613 (10,928 ) (71 )% 13,849 859 % Adjusted EBITDA $ 55,035 $ 60,465 $ 58,679 $ (5,430 ) (9 )% $ 1,786 3 % 60 Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net loss.
The cannabis industry in Europe is in its early stages of development whereby countries within Europe are at different stages of legalization of medical and adult-use cannabis as some countries have expressed a clear political ambition to legalize adult-use cannabis (Germany, Portugal, Luxembourg and Czech Republic), some are engaging in an experiment for adult-use (Germany, Netherlands and Switzerland) and some are debating regulations for cannabinoid-based medicine (France and Spain).
Beyond this, some countries have expressed a clear political ambition to legalize adult-use cannabis (Germany, Portugal, Luxembourg and Czech Republic), some are engaging in experiments for adult-use legalization (Germany, Netherlands and Switzerland) and some are debating regulations for cannabinoid-based medicine (France and Spain).
If neither of the conditions exist, then only the portion of the impairment loss attributable to credit loss is recorded in the statements of net loss and the remaining amount is recorded in other comprehensive income (loss). 64 (vi) Convertible debentures The Company accounts for its convertible debentures in accordance with ASC 470-20 Debt with Conversion and Other Options , whereby the convertible instrument is initially accounted for as a single unit of account, unless it contains a derivative that must be bifurcated from the host contract in accordance with ASC 815-15 Derivatives and Hedging – Embedded Derivatives or the substantial premium model in ASC 470-20 Debt – Debt with Conversion and Other Options applies.
Management engages third party experts to assist in the valuation of material acquisitions. 63 (v) Convertible debentures The Company accounts for its convertible debentures in accordance with ASC 470-20 Debt with Conversion and Other Options , whereby the convertible instrument is initially accounted for as a single unit of account, unless it contains a derivative that must be bifurcated from the host contract in accordance with ASC 815-15 Derivatives and Hedging – Embedded Derivatives or the substantial premium model in ASC 470-20 Debt – Debt with Conversion and Other Options applies.
The Company recognized gain on sale of capital assets of $4.2 million in the year ended May 31, 2024, compared to $0.0 million to the prior year. This gain is predominantly from the sale of Truss Beverage Co. Refer to Note 9 (Business Acquisitions).
The Company recognized a loss on the sale of capital assets in the amount of $0.9 million in the fiscal year ended May 31, 2025 primarily from the sale of our Avanti facility, compared to a gain of $4.2 million in the prior fiscal year which was predominantly from the sale of Truss Beverage Co.
Restructuring costs In connection with executing our acquisition strategy and strategic transactions, the Company incurred restructuring and exit costs associated with the integration efforts of these non-recurring transactions. For the year ended May 31, 2024 and May 31, 2023 respectively, the Company incurred $15.6 million and $9.2 million of restructuring costs.
Restructuring costs In connection with the execution of our acquisition strategy and strategic transactions, the Company incurred non-recurring restructuring and exit costs associated with the integration efforts of these transactions.
New Standards and Interpretations Applicable Effective June 1, 2023 Refer to Part II, Item 8, Note 3, Significant Accounting Policies, of this Form 10-K for additional information on changes in accounting policies. There have been no new standards or interpretations applicable to the Company during the year.
New Standards and Interpretations Applicable Effective June 1, 2024 Refer to Part II, Item 8, Note 3, Significant Accounting Policies, of this Form 10-K for additional information on changes in accounting policies. During the fiscal year ended May 31, 2025, the Company adopted ASU 2023-07: Segment Reporting ( Topic 280) Improvements to Reportable Segment Disclosures, See Note 30 (Segments).
In Europe, we believe that, despite continuing recessionary economic conditions and the Russian conflict with Ukraine, cannabis legalization (both medicinal and adult-use) will continue to gain traction albeit more slowly than originally expected. This is evidenced by the recently adopted cannabis regulations in Germany, which we believe will serve as a catalyst for continued changes in drug policy throughout Europe.
In Europe, we believe that, despite continuing recessionary economic conditions, political uncertainty in various countries and the continuing Russian conflict with Ukraine, cannabis legalization (both medicinal and adult-use) will continue to gain traction albeit more slowly than originally expected.
Furthermore, for the year ended May 31, 2024, the Company recognized a loss of ($4.1) million, resulting from the changes in foreign exchange rates during the period, compared to a loss of ($25.5) million for the prior year, largely associated with the strengthening of the US dollar from the prior year.
The Company recognized a gain of $9.6 million resulting from the changes in foreign exchange rates during the period compared to a loss of $4.1 million for the prior fiscal year period.
On a constant currency basis revenue from Canadian medical cannabis increased to $25.4 million from $25.0 million for the fiscal year ended May 31, 2024. This increase in revenue from medical cannabis is primarily driven by growth in the insured patients category exceeding the decline in un-insured patients attrition to the adult-use recreational market.
This increase in gross revenue from medical cannabis on a constant currency basis was primarily driven by growth in the insured patient category exceeding the decline in uninsured patient attrition to the adult-use recreational market.
Additional cost savings were identified in order to offset the unrealized savings associated with the planned furlough. 47 Results of Operations Our consolidated results, in millions except for per share data, are as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net revenue $ 788,942 $ 627,124 $ 628,372 $ 161,818 26 % $ (1,248 ) (0 )% Cost of goods sold 565,591 480,164 511,555 85,427 18 % (31,391 ) (6 )% Gross profit 223,351 146,960 116,817 76,391 52 % 30,143 26 % Operating expenses: 0 % General and administrative 167,358 165,159 162,801 2,199 1 % 2,358 1 % Selling 37,233 34,840 34,926 2,393 7 % (86 ) (0 )% Amortization 84,752 93,489 115,191 (8,737 ) (9 )% (21,702 ) (19 )% Marketing and promotion 41,933 30,937 30,934 10,996 36 % 3 0 % Research and development 635 682 1,518 (47 ) (7 )% (836 ) (55 )% Change in fair value of contingent consideration (15,790 ) 855 (44,650 ) (16,645 ) (1,947 )% 45,505 (102 )% Impairments — 934,000 378,241 (934,000 ) (100 )% 555,759 147 % Other than temporary change in fair value of convertible notes receivable 42,681 246,330 — (203,649 ) (83 )% 246,330 0 % Litigation costs, net of recoveries 8,251 (505 ) 16,518 8,756 (1,734 )% (17,023 ) (103 )% Restructuring costs 15,581 9,245 795 6,336 69 % 8,450 1,063 % Transaction costs (income), net 15,462 1,613 30,944 13,849 859 % (29,331 ) (95 )% Total operating expenses 398,096 1,516,645 727,218 (1,118,549 ) (74 )% 789,427 109 % Operating loss (174,745 ) (1,369,685 ) (610,401 ) 1,194,940 (87 )% (759,284 ) 124 % Interest expense, net (36,433 ) (13,587 ) (27,944 ) (22,846 ) 168 % 14,357 (51 )% Non-operating (expense) income, net (37,842 ) (66,909 ) 197,671 29,067 (43 )% (264,580 ) (134 )% Loss before income taxes (249,020 ) (1,450,181 ) (440,674 ) 1,201,161 (83 )% (1,009,507 ) 229 % Income tax expense (26,616 ) (7,181 ) (6,542 ) (19,435 ) 271 % (639 ) 10 % Net loss $ (222,404 ) $ (1,443,000 ) $ (434,132 ) $ 1,220,596 (85 )% $ (1,008,868 ) 232 % 48 Use of Non-GAAP Measures The Company reports its financial results in accordance with U.S.
From a cost perspective, we believe the recently enacted tariffs could impact input materials such as aluminum, hops, barley, malt and vape componentry which are partially imported but we intend to mitigate these impacts to the extent possible. 46 Results of Operations Our consolidated results, in millions except for per share data, are as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net revenue $ 821,309 $ 788,942 $ 627,124 $ 32,367 4 % $ 161,818 26 % Cost of goods sold 580,739 565,591 480,164 15,148 3 % 85,427 18 % Gross profit 240,570 223,351 146,960 17,219 8 % 76,391 52 % Operating expenses: General and administrative 167,324 167,358 165,159 (34 ) (0 )% 2,199 1 % Selling 56,039 37,233 34,840 18,806 51 % 2,393 7 % Amortization 88,616 84,752 93,489 3,864 5 % (8,737 ) (9 )% Marketing and promotion 37,048 41,933 30,937 (4,885 ) (12 )% 10,996 36 % Research and development 284 635 682 (351 ) (55 )% (47 ) (7 )% Change in fair value of contingent consideration — (15,790 ) 855 15,790 (100 )% (16,645 ) (1,947 )% Impairment of intangible assets and goodwill 2,096,139 — 934,000 2,096,139 NM (934,000 ) (100 )% Other than temporary change in fair value of convertible notes receivable 21,661 42,681 246,330 (21,020 ) (49 )% (203,649 ) (83 )% Litigation costs, net of recoveries 17,347 8,251 (505 ) 9,096 110 % 8,756 (1,734 )% Restructuring costs 34,283 15,581 9,245 18,702 120 % 6,336 69 % Transaction costs (income), net 4,534 15,462 1,613 (10,928 ) (71 )% 13,849 859 % Total operating expenses 2,523,275 398,096 1,516,645 2,125,179 534 % (1,118,549 ) (74 )% Operating loss (2,282,705 ) (174,745 ) (1,369,685 ) (2,107,960 ) 1,206 % 1,194,940 (87 )% Interest expense, net (29,952 ) (36,433 ) (13,587 ) 6,481 (18 )% (22,846 ) 168 % Non-operating (expense) income, net 10,284 (37,842 ) (66,909 ) 48,126 (127 )% 29,067 (43 )% Loss before income taxes (2,302,373 ) (249,020 ) (1,450,181 ) (2,053,353 ) 825 % 1,201,161 (83 )% Income tax expense (121,017 ) (26,616 ) (7,181 ) (94,401 ) 355 % (19,435 ) 271 % Net loss $ (2,181,356 ) $ (222,404 ) $ (1,443,000 ) $ (1,958,952 ) 881 % $ 1,220,596 (85 )% 47 Use of Non-GAAP Measures The Company reports its financial results in accordance with U.S.
Professional fees decreased by 25% to $5.3 million in the year ended May 31, 2024 from $7.2 million when compared to the prior year as this item was a target of our cost savings initiatives.
Professional fees decreased by 11% to $4.8 million in the fiscal year ended May 31, 2025 from $5.3 million when compared to the prior fiscal year, which is a direct result of our cost savings initiatives.
We may need to take on additional debt or equity financing arrangements in order to achieve these ambitions on a long-term basis.
For the Company's long-term liquidity requirements, we are focused on funding operations through profitable organic and inorganic growth through acquisitions. We may need to take on additional debt or equity financing arrangements in order to achieve these ambitions on a long-term basis.
Revenue from adult-use cannabis: During the fiscal year ended, May 31, 2024, our revenue from Canadian adult-use cannabis product increased 25% to $266.8 million compared to revenue of $214.3 million for the prior year. On a constant currency basis, our revenue from Canadian adult-use cannabis increased 26% to $269.5 million for the fiscal year ended May 31, 2024.
On a constant currency basis, gross revenue from wholesale cannabis for the fiscal year ended May 31, 2025 was $18.8 million compared to $25.3 million for the prior fiscal year ended May 31, 2024.
However, during the quarter, we experienced a marginal dip in market share in Canada from 11.6% to 10.4% from the immediately preceding quarter, as reported by Hifyre data for all provinces excluding Quebec where Weedcrawler was deemed more accurate.
During the quarter, Tilray continued to lead the Canadian market with the highest cannabis revenue in Canada. During the quarter, we maintained our market share in Canada at 9.3% from the immediately preceding quarter as reported by Hifyre data for all provinces, excluding Quebec where Weedcrawler was deemed more accurate.
Transaction (income) costs, net Transaction (income) costs, net, which includes acquisition related income and expenses, related legal, financial advisor and due diligence cost and expenses and transaction related compensation.
Transaction (income) costs, net Transaction (income) costs, net, consists of acquisition related income and expenses, including legal fees, financial advisor and other third-party due diligence cost and expenses as well as any transaction related compensation.
In order to compensate for these limitations, management presents adjusted EBITDA in connection with GAAP results. For the year ended May 31, 2024, adjusted EBITDA increased by $1.8 million to $60.5 million compared to $58.7 in the prior year.
In order to compensate for these limitations, management presents adjusted EBITDA in connection with GAAP results. For the fiscal year ended May 31, 2025, adjusted EBITDA decreased by $5.4 million to $55.0 million compared to $60.5 in the prior fiscal year as we continue to integrate our recent craft beverage acquisitions.
Cannabis revenue Cannabis revenue based on market channel is, as follows: For the year ended May 31, Change Change (in thousands of US dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenue from Canadian medical cannabis $ 25,211 $ 25,000 $ 30,599 $ 211 1 % $ (5,599 ) (18 )% Revenue from Canadian adult-use cannabis 266,846 214,319 209,501 52,527 25 % 4,818 2 % Revenue from wholesale cannabis 25,340 1,436 6,904 23,904 1,665 % (5,468 ) (79 )% Revenue from international cannabis 53,295 43,559 53,887 9,736 22 % (10,328 ) (19 )% Total cannabis revenue 370,692 284,314 300,891 86,378 30 % (16,577 ) (6 )% Excise taxes (97,894 ) (63,884 ) (63,369 ) (34,010 ) 53 % (515 ) 1 % Total cannabis net revenue $ 272,798 $ 220,430 $ 237,522 $ 52,368 24 % $ (17,092 ) (7 )% Cannabis revenue based on market channel in constant currency (1) is, as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of US dollars) 2024 2023 2024 vs. 2023 Revenue from Canadian medical cannabis $ 25,441 $ 25,000 $ 441 2 % Revenue from Canadian adult-use cannabis 269,534 214,319 55,215 26 % Revenue from wholesale cannabis 25,651 1,436 24,215 1,686 % Revenue from international cannabis 53,036 43,559 9,477 22 % Total cannabis revenue 373,662 284,314 89,348 31 % Excise taxes (98,899 ) (63,884 ) (35,015 ) 55 % Total cannabis net revenue $ 274,763 $ 220,430 $ 54,333 25 % (1) The constant currency presentation of our Cannabis revenue based on market channel is a non-GAAP financial measure.
Cannabis revenue Cannabis revenue based on market channel is, as follows: For the year ended May 31, Change Change (in thousands of US dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Revenue from Canadian medical cannabis $ 24,998 $ 25,211 $ 25,000 $ (213 ) (1 )% $ 211 1 % Revenue from Canadian adult-use cannabis 224,048 266,846 214,319 (42,798 ) (16 )% 52,527 25 % Revenue from wholesale cannabis 18,207 25,340 1,436 (7,133 ) (28 )% 23,904 1,665 % Revenue from international cannabis 63,356 53,295 43,559 10,061 19 % 9,736 22 % Total cannabis revenue 330,609 370,692 284,314 (40,083 ) (11 )% 86,378 30 % Excise taxes (81,608 ) (97,894 ) (63,884 ) 16,286 (17 )% (34,010 ) 53 % Total cannabis net revenue $ 249,001 $ 272,798 $ 220,430 $ (23,797 ) (9 )% $ 52,368 24 % Cannabis revenue based on market channel in constant currency (1) is, as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of US dollars) 2025 2024 2025 vs. 2024 Revenue from Canadian medical cannabis $ 25,797 $ 25,211 $ 586 2 % Revenue from Canadian adult-use cannabis 230,953 266,846 (35,893 ) (13 )% Revenue from wholesale cannabis 18,779 25,340 (6,561 ) (26 )% Revenue from international cannabis 63,211 53,295 9,916 19 % Total cannabis revenue 338,740 370,692 (31,952 ) (9 )% Excise taxes (84,156 ) (97,894 ) 13,738 (14 )% Total cannabis net revenue $ 254,584 $ 272,798 $ (18,214 ) (7 )% (1) The constant currency presentation of our Cannabis revenue based on market channel is a non-GAAP financial measure.
The increase in Wellness gross margin was driven by lower material cost and overhead optimization. 55 Operating expenses For the year ended May 31, Change Change (in thousands of US dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 General and administrative $ 167,358 $ 165,159 $ 162,801 $ 2,199 1 % $ 2,358 1 % Selling 37,233 34,840 34,926 2,393 7 % (86 ) (0 )% Amortization 84,752 93,489 115,191 (8,737 ) (9 )% (21,702 ) (19 )% Marketing and promotion 41,933 30,937 30,934 10,996 36 % 3 0 % Research and development 635 682 1,518 (47 ) (7 )% (836 ) (55 )% Change in fair value of contingent consideration (15,790 ) 855 (44,650 ) (16,645 ) (1,947 )% 45,505 (102 )% Impairments — 934,000 378,241 (934,000 ) (100 )% 555,759 147 % Other than temporary change in fair value of convertible notes receivable 42,681 246,330 — (203,649 ) (83 )% 246,330 NM Litigation costs, net of recoveries 8,251 (505 ) 16,518 8,756 (1,734 )% (17,023 ) (103 )% Restructuring costs 15,581 9,245 795 6,336 69 % 8,450 1,063 % Transaction costs (income), net 15,462 1,613 30,944 13,849 859 % (29,331 ) (95 )% Total operating expenses $ 398,096 $ 1,516,645 $ 727,218 $ (1,118,549 ) (74 )% $ 789,427 109 % Total operating expenses for the year ended May 31, 2024, decreased by $1,118.5 million to $398.1 million from $1,516.6 million as compared to prior year.
Wellness gross margin: Gross margin of 32% for the fiscal year ended May 31, 2025 increased from a gross margin of 30% when compared to the fiscal year ended May 31, 2024, resulting from strong operational efficiencies, lower input costs and the culmination of a change in sales mix towards higher margin product offerings including HiBall energy drinks. 54 Operating expenses For the year ended May 31, Change Change (in thousands of US dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 General and administrative $ 167,324 $ 167,358 $ 165,159 $ (34 ) (0 )% $ 2,199 1 % Selling 56,039 37,233 34,840 18,806 51 % 2,393 7 % Amortization 88,616 84,752 93,489 3,864 5 % (8,737 ) (9 )% Marketing and promotion 37,048 41,933 30,937 (4,885 ) (12 )% 10,996 36 % Research and development 284 635 682 (351 ) (55 )% (47 ) (7 )% Change in fair value of contingent consideration — (15,790 ) 855 15,790 (100 )% (16,645 ) (1,947 )% Impairment of intangible assets and goodwill 2,096,139 — 934,000 2,096,139 NM (934,000 ) (100 )% Other than temporary change in fair value of convertible notes receivable 21,661 42,681 246,330 (21,020 ) (49 )% (203,649 ) (83 )% Litigation costs, net of recoveries 17,347 8,251 (505 ) 9,096 110 % 8,756 (1,734 )% Restructuring costs 34,283 15,581 9,245 18,702 120 % 6,336 69 % Transaction costs (income), net 4,534 15,462 1,613 (10,928 ) (71 )% 13,849 859 % Total operating expenses $ 2,523,275 $ 398,096 $ 1,516,645 $ 2,125,179 534 % $ (1,118,549 ) (74 )% Operating expenses are comprised of general and administrative; selling; amortization; marketing and promotion; research and development; change in fair value of contingent consideration; impairments; other than temporary change in fair value of convertible notes receivable; litigation costs; net of recoveries; restructuring costs; and transaction costs (income), net.
See “ Reconciliation of Non-GAAP Financial Measures to GAAP Measures ” below for a reconciliation of these Non-GAAP Measures to our most comparable GAAP measure and the discussion above captioned "Cash and Marketable Securities." 50 Segment Reporting Our reportable segments revenue is primarily comprised of revenues from our beverage alcohol, cannabis, distribution, and wellness operations, as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Beverage alcohol business $ 202,094 $ 95,093 $ 71,492 $ 107,001 113 % $ 23,601 33 % Cannabis business 272,798 220,430 237,522 52,368 24 % (17,092 ) (7 )% Distribution business 258,740 258,770 259,747 (30 ) (0 )% (977 ) (0 )% Wellness business 55,310 52,831 59,611 2,479 5 % (6,780 ) (11 )% Total net revenue $ 788,942 $ 627,124 $ 628,372 $ 161,818 26 % $ (1,248 ) (0 )% Our reportable segments revenue reported in constant currency (1) are as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of U.S. dollars) 2024 2023 2024 vs. 2023 Beverage alcohol business 202,094 $ 95,093 $ 107,001 113 % Cannabis business 274,763 220,430 54,333 25 % Distribution business 259,671 258,770 901 0 % Wellness business 55,533 52,831 2,702 5 % Total net revenue $ 792,061 $ 627,124 $ 164,937 26 % Our geographic revenue is, as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 USA $ 233,141 $ 123,284 $ 103,991 $ 109,857 89 % $ 19,293 19 % Canada 243,722 201,361 210,141 42,361 21 % (8,780 ) (4 )% EMEA 296,450 284,567 296,911 11,883 4 % (12,344 ) (4 )% Rest of World 15,629 17,912 17,329 (2,283 ) (13 )% 583 3 % Total net revenue $ 788,942 $ 627,124 $ 628,372 $ 161,818 26 % $ (1,248 ) (0 )% Our geographic revenue in constant currency (1) is, as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of U.S. dollars) 2024 2023 2024 vs. 2023 USA $ 233,141 $ 123,284 $ 109,857 89 % Canada 246,156 201,361 44,795 22 % EMEA 286,174 284,567 1,607 1 % Rest of World 26,590 17,912 8,678 48 % Total net revenue $ 792,061 $ 627,124 $ 164,937 26 % 51 Our geographic capital assets are, as follows: For the year ended May 31, Change (in thousands of U.S. dollars) 2024 2023 2024 vs. 2023 USA $ 141,314 $ 63,925 $ 77,389 121 % Canada 313,359 255,248 58,111 23 % EMEA 99,921 107,131 (7,210 ) (7 )% Rest of World 3,653 3,363 290 9 % Total capital assets $ 558,247 $ 429,667 $ 128,580 30 % Beverage alcohol revenue Revenue from our Beverage operations increased to $202.1 million the year ended May 31, 2024, compared to revenue of $95.1 million for the prior year same period.
See “ Reconciliation of Non-GAAP Financial Measures to GAAP Measures ” below for a reconciliation of these Non-GAAP Measures to our most comparable GAAP measure and the discussion above captioned "Cash and Marketable Securities." 49 Segment Reporting Our reportable segments net revenue is primarily comprised of net revenues from our beverage, cannabis, distribution, and wellness operations, as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Beverage business $ 240,595 $ 202,094 $ 95,093 $ 38,501 19 % $ 107,001 113 % Cannabis business 249,001 272,798 220,430 (23,797 ) (9 )% 52,368 24 % Distribution business 271,228 258,740 258,770 12,488 5 % (30 ) (0 )% Wellness business 60,485 55,310 52,831 5,175 9 % 2,479 5 % Total net revenue $ 821,309 $ 788,942 $ 627,124 $ 32,367 4 % $ 161,818 26 % Our reportable segments net revenue reported in constant currency (1) are as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of U.S. dollars) 2025 2024 2025 vs. 2024 Beverage business 240,595 $ 202,094 $ 38,501 19 % Cannabis business 254,584 272,798 (18,214 ) (7 )% Distribution business 277,187 258,740 18,447 7 % Wellness business 61,370 55,310 6,060 11 % Total net revenue $ 833,736 $ 788,942 $ 44,794 6 % Our geographic net revenue is, as follows: For the year ended May 31, Change Change (in thousands of U.S. dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 USA $ 273,695 $ 233,141 $ 123,284 $ 40,554 17 % $ 109,857 89 % Canada 212,860 243,722 201,361 (30,862 ) (13 )% 42,361 21 % EMEA 323,350 296,450 284,567 26,900 9 % 11,883 4 % Rest of World 11,404 15,629 17,912 (4,225 ) (27 )% (2,283 ) (13 )% Total net revenue $ 821,309 $ 788,942 $ 627,124 $ 32,367 4 % $ 161,818 26 % Our geographic net revenue in constant currency (1) is, as follows: For the year ended May 31, Change as reported in constant currency Change % Change (in thousands of U.S. dollars) 2025 2024 2025 vs. 2024 USA $ 273,695 $ 233,141 $ 40,554 17 % Canada 219,463 243,722 (24,259 ) (10 )% EMEA 322,960 296,450 26,510 9 % Rest of World 17,618 15,629 1,989 13 % Total net revenue $ 833,736 $ 788,942 $ 44,794 6 % 50 Our geographic capital assets are, as follows: For the year ended May 31, Change (in thousands of U.S. dollars) 2025 2024 2025 vs. 2024 USA $ 200,003 $ 141,314 $ 58,689 42 % Canada 267,458 313,359 (45,901 ) (15 )% EMEA 97,371 99,921 (2,550 ) (3 )% Rest of World 3,601 3,653 (52 ) (1 )% Total capital assets $ 568,433 $ 558,247 $ 10,186 2 % Beverage revenue Net revenue from our Beverage operations increased to $240.6 million for the fiscal year ended May 31, 2025, compared to net revenue of $202.1 million for the prior fiscal year ended May 31, 2024.
Today, Germany remains the largest medical cannabis market in Europe. Subsequent to the end of our third quarter in fiscal year 2024, the Cannabis Act, consisting of two parts, the KCanG and MedCanG, passed both chambers of the German parliament, was signed into law by the Office of the Federal President.
Germany . Today, Germany remains the largest medical cannabis market in Europe. On April 1, 2024, the Cannabis Act, consisting of two parts, the CanG and MedCanG, was signed into law by the Office of the Federal President and decriminalization and MedCanG portions of the Cannabis Act became effective.
The MedMen Convertible Note was valued based upon the fair value of the collateral assets net of disposal costs and has been reduced to reflect recent events, including the appointment of a chief restructuring officer for MedMen on January 23, 2024 and pending asset sales, as referenced in Note 11 (Convertible Notes Receivable).
The MedMen Convertible Note was valued based upon the estimated fair value of the collateral assets net of estimated disposal costs and has been reduced to reflect recent developments in restructuring efforts.
Through analysis of the current market conditions, the following key trends have emerged and are anticipated to influence the near-term future in the industry: - Market share . Tilray continues to maintain its market leadership position in Canada.
The cannabis industry in Canada continues to evolve given how nascent the industry is with federal legalization of adult-use cannabis occurring just over five years ago. Through analysis of the current market conditions, the following key trends have emerged and are anticipated to influence the near-term future in the Canadian cannabis industry: - Market share .
We continue to believe that Tilray is well-positioned in Germany, especially in light of the enactment of MedCanG and given that, subsequent to the end of the year, our wholly owned subsidiary, Aphria RX, was granted new licenses for the cultivation and distribution of medical cannabis in Germany.
We continue to believe that Tilray is well-positioned in Germany, especially since the enactment of MedCanG benefits our medical leadership in the German market and given that we are one of only three cultivators of medical cannabis in Germany as our wholly owned subsidiary, Aphria RX, was awarded the first license for the cultivation of medical cannabis in Germany by the BfArM under the liberalized regime.
The net decrease in fair value of $16.6 million was driven by the conclusion of the Sweetwater earnout, the favorable cash settlement for the Truss contingent consideration, and was offset by an increase related to the higher probability of achieving the contingent consideration from the Montauk acquisition.
In the prior fiscal year period, we recognized a a gain of $15.8 million resulting from the conclusion of the SweetWater earnout period, the favorable cash settlement relating to the final determination and settlement of the contingent consideration related to the Truss acquisition, all of which was offset by an increase in the fair value of the contingent consideration driven by the increased probability of achieving the contingent consideration associated with the Montauk Brewing Company acquisition.
Non-operating income (expense), net For the year ended May 31, Change Change (in thousands of US dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Change in fair value of convertible debenture payable $ (19,736 ) $ (43,651 ) $ 163,670 $ 23,915 (55 )% $ (207,321 ) (127 )% Change in fair value of warrant liability (1,436 ) 12,438 63,913 (13,874 ) (112 )% (51,475 ) (81 )% Foreign exchange (loss) gain (4,086 ) (25,535 ) (28,383 ) 21,449 (84 )% 2,848 (10 )% Loss on long-term investments (217 ) (2,190 ) (6,737 ) 1,973 (90 )% 4,547 (67 )% Other non-operating (losses) gains, net (12,367 ) (7,971 ) 5,208 (4,396 ) 55 % (13,179 ) (253 )% Total non-operating income (expense) $ (37,842 ) $ (66,909 ) $ 197,671 $ 29,067 (43 )% $ (264,580 ) (134 )% For the year ended May 31, 2024, the Company recognized a loss on the change in fair value of its APHA 24 convertible debentures of ($19.7) million, compared to a loss on the change in fair value of ($43.7) million for the prior year.
During the fiscal year ended May 31, 2025, transaction (income) costs, net decreased 71% from the prior fiscal year period as a result of lower transaction costs associated with Craft Acquisition II in the current fiscal year compared to the costs associated with the HEXO, Truss and the Craft Acquisition I in the prior fiscal year. 58 Non-operating income (expense), net For the year ended May 31, Change Change (in thousands of US dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Change in fair value of convertible debenture payable $ — $ (19,736 ) $ (43,651 ) $ 19,736 (100 )% $ 23,915 (55 )% Change in fair value of warrant liability 2,161 (1,436 ) 12,438 3,597 (250 )% (13,874 ) (112 )% Foreign exchange (loss) gain 9,639 (4,086 ) (25,535 ) 13,725 (336 )% 21,449 (84 )% Loss on long-term investments (5,550 ) (217 ) (2,190 ) (5,333 ) 2,458 % 1,973 (90 )% Other non-operating (losses) gains, net 4,034 (12,367 ) (7,971 ) 16,401 (133 )% (4,396 ) 55 % Total non-operating income (expense) $ 10,284 $ (37,842 ) $ (66,909 ) $ 48,126 (127 )% $ 29,067 (43 )% For the fiscal year ended May 31, 2025, the Company recognized a change in fair value of its convertible debentures payable of $nil compared to $19.7 million in the prior fiscal year period as the instrument was fully settled upon maturity, and recognized a change in fair value of its warrants, resulting in a gain of $2.2 million compared to a loss of $1.4 million as a result of the change in our share price and the exercise price of the instrument.
As a result of delays in legalization across multiple markets, management continues to optimize our operating structure, headcount, as well as the elimination of other discretionary operational costs.
As a result of delays in legalization across multiple markets, management continues to optimize our operating structure, headcount, as well as the elimination of other discretionary operational costs. Additionally, the Company continues to invest our excess cash in the short-term in marketable securities which are comprised of U.S. treasury bills and term deposits with major Canadian, European and Australian banks.
Selling costs For the year ended May 31, 2024, the Company incurred selling costs of $37.2 million or 4.7% of revenue as compared to $34.8 or 5.5% of revenue in the prior year. These costs relate to third-party distributor commissions, shipping costs, Health Canada cannabis fees, and patient acquisition and maintenance costs.
Selling costs For the fiscal year ended May 31, 2025, the Company incurred selling costs of $56.0 million or 6.8% of net revenue as compared to $37.2 or 4.7% of net revenue in the prior fiscal year.
Contractual obligations We lease various facilities, under non-cancelable operating leases, which expire at various dates through September 2040: Operating Finance leases leases 2025 $ 5,821 $ 4,036 2026 5,540 4,036 2027 4,893 4,036 2028 3,997 4,036 Thereafter 6,101 79,993 Total minimum lease payments $ 26,352 $ 96,137 Imputed interest (5,879 ) (51,097 ) Obligations recognized $ 20,473 $ 45,040 Purchase and other commitments The Company has payments on long-term debt, refer to Note 16 (Long-term debt), convertible notes, refer to Note 17 (Convertible debentures payable), material purchase commitments and construction commitments as follows: Total 2025 2026 2027 2028 Thereafter Long-term debt repayment $ 174,666 $ 15,507 $ 43,232 $ 11,764 $ 68,672 $ 35,491 Convertible debentures payable 172,830 330 — 172,500 — — Material purchase obligations 59,959 26,410 33,549 — — — Construction commitments 575 575 — — — — Total $ 408,030 $ 42,822 $ 76,781 $ 184,264 $ 68,672 $ 35,491 67 Except as disclosed elsewhere in this Part II, Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , there have been no material changes with respect to the contractual obligations of the Company during the year-to-date period except for those related to the Company’s acquisitions.
Contractual obligations We lease various facilities, under non-cancelable operating leases, which expire on various dates through September 2040: Operating Finance leases leases 2026 $ 7,171 $ 4,515 2027 6,840 4,515 2028 5,786 4,515 2029 2,846 4,368 Thereafter 10,948 66,570 Total minimum lease payments $ 33,591 $ 84,483 Imputed interest (7,580 ) (38,628 ) Obligations recognized $ 26,011 $ 45,855 Purchase and other commitments The Company has payments on long-term debt, refer to Note 16 (Long-term debt), convertible notes, refer to Note 17 (Convertible debentures payable), material purchase commitments and construction commitments as follows: Total 2026 2027 2028 2029 Thereafter Long-term debt repayment $ 164,124 14,767 18,243 97,828 3,489 29,797 Convertible debentures payable 105,000 — — 105,000 — — Material purchase obligations 78,181 48,135 30,046 — — — Construction commitments 528 528 — — — — Total $ 347,833 $ 63,430 $ 48,289 $ 202,828 $ 3,489 $ 29,797 66 Except as disclosed elsewhere in this Part II, Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , there have been no material changes with respect to the contractual obligations of the Company during the year-to-date period except for those related to the Company’s acquisitions.
Due to the transition to asset-light business models, the Canadian cannabis industry has experienced a reduction in excess inventory resulting in price increases in the B2B market. This shift in market dynamics and demand enabled us to strategically sell inventory that was sought after in the wholesale market during the year but did not impact our sales to provincial boards.
Due to the transition to asset-light business models, the Canadian cannabis industry has experienced a reduction in excess inventory resulting in price increases in the B2B market.
Further, the prior fiscal year revenue includes HEXO-related advisory fees in the amount of $40.4 million for the fiscal year ended May 31, 2023, compared to $1.5 million for the fiscal year ended May 31, 2024. Excluding the revenue from advisory services, adult-use cannabis revenue increased by $91.4 million for the fiscal year ended May 31, 2024.
Lastly, gross revenue from Canadian adult-use cannabis products also included $1.5 million of cannabis advisory services revenue in the fiscal year ended May 31, 2025, compared to $1.5 million in the fiscal year ended May 31, 2024.
General and administrative costs For the year ended May 31, Change Change (in thousands of US dollars) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Executive compensation $ 15,597 $ 13,655 $ 14,128 $ 1,942 14 % $ (473 ) (3 )% Office and general 28,460 27,845 27,153 615 2 % 692 3 % Salaries and wages 68,076 57,228 51,693 10,848 19 % 5,535 11 % Stock-based compensation 31,769 39,595 35,994 (7,826 ) (20 )% 3,601 10 % Insurance 12,586 12,033 17,536 553 5 % (5,503 ) (31 )% Professional fees 5,345 7,166 13,047 (1,821 ) (25 )% (5,881 ) (45 )% Gain on sale of capital assets (4,198 ) (48 ) (682 ) (4,150 ) 8,646 % 634 (93 )% Insurance proceeds — — (4,032 ) — — 4,032 (100 )% Travel and accommodation 5,138 4,530 4,203 608 13 % 327 8 % Rent 4,585 3,155 3,761 1,430 45 % (606 ) (16 )% Total general and administrative costs $ 167,358 $ 165,159 $ 162,801 $ 2,199 1 % $ 2,358 1 % 56 Executive compensation increased by 14% in the year ended May 31, 2024 compared to $13.7 the prior year, primarily as a result of changes in estimates related to timing of compensation accruals.
General and administrative costs For the year ended May 31, Change Change (in thousands of US dollars) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Salaries and wages $ 88,015 $ 83,673 $ 70,883 $ 4,342 5 % $ 12,790 18 % Office and general 28,314 28,460 27,845 (146 ) (1 )% 615 2 % Stock-based compensation 24,289 31,769 39,595 (7,480 ) (24 )% (7,826 ) (20 )% Insurance 11,843 12,586 12,033 (743 ) (6 )% 553 5 % Professional fees 4,765 5,345 7,166 (580 ) (11 )% (1,821 ) (25 )% Gain on sale of capital assets 928 (4,198 ) (48 ) 5,126 (122 )% (4,150 ) 8,646 % Travel and accommodation 5,717 5,138 4,530 579 11 % 608 13 % Rent 3,453 4,585 3,155 (1,132 ) (25 )% 1,430 45 % Total general and administrative costs $ 167,324 $ 167,358 $ 165,159 $ (34 ) (0 )% $ 2,199 1 % 55 Salaries and wages increased by 5% during the fiscal year ended May 31, 2025.
Marketing and promotion cost For the year ended May 31, 2024, the Company incurred marketing and promotion costs of $41.9 million, as compared to $30.9 in the prior year.
Marketing and promotion cost For the fiscal year ended May 31, 2025, the Company incurred marketing and promotion costs of $37.0 million, as compared to $41.9 in the prior fiscal year. This decrease was primarily due to the yearly variability in discretionary marketing expenses, offset by the inclusion of expenses from our recent Craft Acquisition II, effective September 1, 2024.
Amortization The Company incurred non-production related amortization charges of $84.8 million for the year ended May 31, 2024 compared to $93.5 million in 2023. The decreased amortization is a result of the reduced intangible asset levels, as a result of prior year impairments.
Amortization The Company incurred non-production related amortization charges of $88.6 million for the fiscal year ended May 31, 2025 compared to $84.8 million in the prior fiscal year period based on depreciable capital and intangible assets useful lives.
Lastly, we are also expanding into the functional beverage category through the launch of Liquid Love canned sparkling water positioning us for sustained growth and differentiation in the competitive beverage segment. 43 In the spirits category, Breckenridge Distillery is an innovative leader within the bourbon industry, making notable strides in vodka and gin markets while offering a comprehensive hospitality experience through its world-class restaurant and retail location.
In the spirits category, Breckenridge Distillery stands out as a beacon within the bourbon industry, making notable strides in vodka and gin markets while offering a comprehensive hospitality experience through its world-class restaurant and retail location. Our primary growth objective centers on expanding market share across the United States.
Cash flows from investing activities The increase in net cash provided by investing activities to $128.3 million from net cash used in investing activities of ($285.1) million in 2024 compared to 2023 changed primarily due to the sale of marketable securities in the current periods compared to investing in marketable securities in the prior periods as well as the cash used in the acquisition of various businesses, Note 9 (Business acquisitions). 66 Cash flows from financing activities The cash used in financing activities of ($75.2) million in the period ended May 31, 2024, changed from $70.2 million provided by financing activities in the period ended May 31, 2023.
Cash flows from investing activities Net cash used in investing activities was ($46.7) million for the fiscal year ended May 31, 2025 compared to net cash provided by investing activities of $128.3 million for the prior fiscal year period, resulting from the purchase of marketable securities in the current fiscal year compared to the sale of marketable securities in the prior period, and the differences in cash paid for the Craft Acquisition II in the current fiscal year compared to HEXO, Truss and Craft Acquisition I in the prior fiscal year period. 65 Cash flows from financing activities Net cash provided by financing activities was $133.5 million for the fiscal year ended May 31, 2025 compared to net cash used in financing activities of ($75.2) million for the prior fiscal year period.
Several key trends we expect to shape the near-term outlook for our results in this segment are in two main categories; beer and spirts: - Beverage Alcohol Distribution . In alignment with our strategic vision, we have reevaluated and initiated a refined craft beer strategy focused on enhancing our relevance within home markets.
Trends and Other Factors Affecting Our Business Beverage market trends: Within the beverage category, we expect the following key trends to shape the near-term outlook in this segment: - Beverage Distribution . In furtherance of our strategic vision, we remain focused on enhancing our relevance within home markets, focusing on growing our brands in their core markets.
The fixed impact of excise per gram, notwithstanding the decline in average selling prices, further compounds these challenges, prompting ongoing industry lobbying efforts.
Historical price compression in specific categories is expected to persist in the market, intensified by fierce competition among the approximately 1,000 Licensed Producers in Canada. The fixed impact of excise per gram, notwithstanding the decline in average selling prices, further compounds these challenges, and has promoted ongoing industry lobbying efforts. International cannabis market trends.
In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation. 60 Historically, we have included lease expenses for leases that were treated differently under IFRS 16 and ASC 842 Leases, in the calculation of adjusted EBITDA, aiming to align our definition with industry peers reporting under IFRS.
In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation decisions. 59 We do not consider adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP.
In the current twelve-month period, we recognized $10.2 million related to employee termination benefits costs, costs for the conversion from cannabis to produce at Quebec cultivation facility(which is currently held for sale), and the optimization of our Redecan facilities. • Truss Acquisition: In relation to the acquisition of Truss, the Company determined to repurpose the facility for the production of non-cannabis beverages.
In the fiscal year ended May 31, 2025, we recognized $10.4 million of expenses related to employee termination severance and benefits and other costs related to the conversion of the HEXO Quebec cultivation facility from cannabis production to produce production, the optimization of our Redecan facilities, and $1.0 million of restructuring charges related to the exiting of the Truss facility following its sale to a third party in the fiscal year ended May 31, 2024.
Adjusted gross margin of 46% decreased in the year ended May 31, 2024, from 53% in the year ended May 31, 2023.
Adjusted gross margin of 39% decreased in the fiscal year ended May 31, 2025, from 46% in the fiscal year ended May 31, 2024. The change in the adjusted beverage gross margin during the fiscal year ended May 31, 2025 was driven by several factors, including our continued integration efforts of our Craft Acquisition I.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo address these risks, we have implemented a comprehensive cybersecurity program, which includes, regular risk assessments and vulnerability testing to identify and address potential weaknesses in our systems, deployment of robust access controls and encryption technologies to protect sensitive data, mandatory annual employee training and awareness programs to promote cybersecurity best practices and prevent social engineering attacks, and continual monitoring and incident response procedures to detect and respond to cybersecurity incidents in a timely manner.
Biggest changeTo address these risks, we have implemented a comprehensive cybersecurity program, which includes, regular risk assessments and vulnerability testing to identify and remediate potential weaknesses in our infrastructure, deployment of advanced access controls, encryption, and endpoint protection to safeguard sensitive data such as customer and medical information, mandatory annual cybersecurity training and awareness programs for all employees to reduce the risk of social engineering and phishing attacks, and continual monitoring and incident response protocols to detect, contain and respond to cybersecurity incidents in a timely and effective manner.
Based on the information we have as of the date of this Form 10-K, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A.
As of the date of this Form 10 -K, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A. Risk Factors” for further information about these risks.
Risk Factors” for further information about these risks. Cybersecurity governance Cybersecurity is an important part of our risk management processes and is an area of focus for our Board, Chief Information Officer ("CIO") whom reports to the Chief Executive Officer, and management team.
Cybersecurity governance Cybersecurity is an important part of our risk management processes and is an area of focus for our Board, Chief Information Officer ("CIO") whom reports directly to the Chief Executive Officer, and management team.
Additionally, given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, our Board of Directors oversees cybersecurity risk management and regularly reviews our cybersecurity strategy and initiatives. The Board receives quarterly and as needed updates on cybersecurity matters from the CIO and management.
Additionally, given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, our Board of Directors oversees cybersecurity risk management and regularly reviews our cybersecurity strategy and initiatives.
We also have information security and data privacy policies and procedures in place applicable to our directors, officers, employees, contractors and suppliers. Third parties service providers also contribute to our overall cybersecurity. We engage third parties to support in the design, implementation and ongoing efforts to help identify and mitigate cybersecurity risks.
We also have information security and data privacy policies and procedures in place applicable to our directors, officers, employees, contractors and suppliers. Third parties service providers also contribute to our overall cybersecurity. We engage third parties that are cybersecurity experts to support in the design, implementation and continuous improvement of our cybersecurity program.
Item 1C. Cybersecurity Cybersecurity risk, management, & strategy Tilray recognizes the importance of cybersecurity in safeguarding our systems, data, and operations and we are committed to addressing the significant risks posed by cyber threats.
Item 1C. Cybersecurity Cybersecurity risk, management, and strategy Tilray recognizes that cybersecurity is critical to protecting our systems, data, and operations. We are committed to addressing the significant risks posed by cyber threats by proactively managing the evolving landscape through a comprehensive, enterprise wide approach.
Tilray is dedicated to maintaining a robust cybersecurity program to safeguard our assets, data, and stakeholders' interests. We remain vigilant in our efforts to identify, assess, and mitigate cybersecurity risks and are committed to transparency and accountability in our cybersecurity disclosures. 37
We remain vigilant in our efforts to identify, assess, and mitigate cybersecurity risks and are committed to transparency and accountability in our cybersecurity disclosures. 36
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The Board receives quarterly and as needed updates on cybersecurity matters from the CIO and management on topics including threat landscape developments, incident response readiness, and program enhancements. Tilray is dedicated to maintaining a robust cybersecurity program to safeguard our assets, data, and stakeholders’ interests.

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(Storage) Patchogue, NY Beverage Alcohol Leased 20,000 10 Barrel Brewing (Brewpub) Bend, OR Beverage Alcohol Leased 4,000 10 Barrel Brewing, LLC (Brewpub) Portland, OR Beverage Alcohol Leased 8,000 10 Barrel Brewing, LLC (Storage) Bend, OR Beverage Alcohol Leased 4,000 10 Barrel Brewing, LLC (Storage) Bend, OR Beverage Alcohol Leased 1,930 10 Barrel Brewing, LLC (Processing / Pub facility) Bend, OR Beverage Alcohol Leased 69,000 10 Barrel Brewing, LLC (Craft Brewery) Bend, OR Beverage Alcohol Leased 25,000 10 Barrel Brewing Idaho, LLC (Brewpub) Boise, ID Beverage Alcohol Leased 9,000 Redhook (Brewery/Pub facility) Seattle, WA Beverage Alcohol Leased 13,000 Widmer (Craft Brewery) Portland, OR Beverage Alcohol Leased 3,000 International: Tilray EU Campus and Cultivation Site (Cannabis Cultivation and Processing) Cantanhede, Portugal Cannabis Owned 3 3,300,000 CC Pharma (Distribution Operations) Densborn, Germany Distribution Owned 70,000 Aphria RX (Cannabis Cultivation) Neumünster, Germany Cannabis Owned 65,000 FL Group Srl (Distribution Operations) Vado Ligure, Italy Cannabis Leased 4,700 ABP (Distribution Operations) Buenos Aires, Argentina Distribution Leased 10,000 38 1 Aphria Diamond is a 51% majority-owned subsidiary of Aphria, Inc.
Biggest change(Storage) Patchogue, NY Beverage Leased 20,000 10 Barrel Brewing (Brewpub) Bend, OR Beverage Leased 4,000 10 Barrel Brewing, LLC (Brewpub) Portland, OR Beverage Leased 8,000 10 Barrel Brewing, LLC (Storage) Bend, OR Beverage Leased 4,000 10 Barrel Brewing, LLC (Storage) Bend, OR Beverage Leased 1,930 10 Barrel Brewing, LLC (Processing / Pub facility) Bend, OR Beverage Leased 69,000 10 Barrel Brewing, LLC (Craft Brewery) Bend, OR Beverage Leased 25,000 10 Barrel Brewing Idaho, LLC (Brewpub) Boise, ID Beverage Leased 9,000 Redhook (Brewery/Pub facility) Seattle, WA Beverage Leased 13,000 Widmer (Craft Brewery) Portland, OR Beverage Leased 3,000 Terrapin Beer Company, LLC (Brewery/Pub facility) Athens, GA Beverage Owned 100,000 Terrapin Beer Company, LLC (Warehouse / Storage) Athens, GA Beverage Owned 24,000 Terrapin Beer Company, LLC (Processing / Distribution) Athens, GA Beverage Leased 68,000 Detroit Rivertown Brewing Company, LLC (Brewpub) Detroit, MI Beverage Leased 20,000 Liquid GR, LLC (Brewpub) Grand Rapids, MI Beverage Leased 6,000 Park Brewing, LLC (Restaurant / Brewpub) Grosse Pointe Park, MI Beverage Leased 10,000 McKenzie River Brewing Company, LLC (Brewery/Pub facility) Eugene, OR Beverage Owned 150,000 McKenzie River Brewing Company, LLC (Restaurant / Brewpub) Springfield, OR Beverage Leased 20,000 McKenzie River Brewing Company, LLC (Processing / Distribution) Eugene, OR Beverage Leased 32,000 Revolver Brewing Company, LLC (Brewpub) Grandbury, TX Beverage Leased 32,000 International: Tilray EU Campus and Cultivation Site (Cannabis Cultivation and Processing) Cantanhede, Portugal Cannabis Owned 3 3,300,000 CC Pharma (Distribution Operations) Densborn, Germany Distribution Owned 70,000 Aphria RX (Cannabis Cultivation) Neumünster, Germany Cannabis Owned 65,000 FL Group Srl (Distribution Operations) Vado Ligure, Italy Cannabis Leased 4,700 ABP (Distribution Operations) Buenos Aires, Argentina Distribution Leased 10,000 37 1 Aphria Diamond is a 51% majority-owned subsidiary of Aphria, Inc.
(Cannabis Cultivation and Processing) Gatineau, QC Cannabis Owned 4 1,292,000 Redecan (Cannabis Cultivation and Processing) Fenwick, ON Cannabis Owned 400,000 Redecan (Cannabis Cultivation and Processing) Cayuga, ON Cannabis Owned 1,644,000 5 United States: SweetWater Brewery (Craft Brewery) Atlanta, GA Beverage Alcohol Owned 158,000 SweetWater Colorado (Craft Brewery) Fort Collins, CO Beverage Alcohol Owned 33,000 Breckenridge Distillery (Craft Distillery) Breckenridge, CO Beverage Alcohol Owned 23,000 Breckenridge Distillery Warehouse (Storage) Denver, CO Beverage Alcohol Owned 75,000 Montauk Brewing Company (Brewery/Pub facility) Montauk, NY Beverage Alcohol Leased 4,000 Fort Collins (Warehouse - Inactive) Fort Collins, CO N/A Owned 4 50,000 Breckenridge Brewery, LLC (Brewery/Pub facility) Littleton, CO Beverage Alcohol Owned 450,000 Breckenridge Brewery, LLC (Brewpub) Littleton, CO Beverage Alcohol Owned 2,500 Craft Brew Alliance, Inc.
(Cannabis Cultivation and Processing) Gatineau, QC Cannabis Owned 1,292,000 Redecan (Cannabis Cultivation and Processing) Fenwick, ON Cannabis Owned 400,000 Redecan (Cannabis Cultivation and Processing) Cayuga, ON Cannabis Owned 5 1,644,000 United States: SweetWater Brewery (Craft Brewery) Atlanta, GA Beverage Owned 158,000 SweetWater Colorado (Craft Brewery) Fort Collins, CO Beverage Owned 33,000 Breckenridge Distillery (Craft Distillery) Breckenridge, CO Beverage Owned 23,000 Breckenridge Distillery Warehouse (Storage) Denver, CO Beverage Owned 75,000 Montauk Brewing Company (Brewery/Pub facility) Montauk, NY Beverage Leased 4,000 Fort Collins (Warehouse - Inactive) Fort Collins, CO N/A Owned 4 50,000 Breckenridge Brewery, LLC (Brewery/Pub facility) Littleton, CO Beverage Owned 450,000 Breckenridge Brewery, LLC (Brewpub) Littleton, CO Beverage Owned 2,500 Craft Brew Alliance, Inc.
(Craft Brewery) Portland, OR Beverage Alcohol Owned 82,000 BBI Acquisition Co. (Brewpub) Breckenridge, CO Beverage Alcohol Leased 8,000 Blue Point Brewing Company, Inc. (Distribution) Patchogue, NY Beverage Alcohol Leased 54,000 Blue Point Brewing Company, Inc.
(Craft Brewery) Portland, OR Beverage Owned 82,000 BBI Acquisition Co. (Brewpub) Breckenridge, CO Beverage Leased 8,000 Blue Point Brewing Company, Inc. (Distribution) Patchogue, NY Beverage Leased 54,000 Blue Point Brewing Company, Inc.
(Cannabis Cultivation) Leamington, ON Cannabis Owned 1 1,500,000 Broken Coast (Cannabis Cultivation) Duncan, BC Cannabis Owned 4 47,000 Avanti (EU-GMP Cannabis Processing and Lab) Brampton, ON Cannabis Owned 18,000 Broken Coast (Cannabis Cultivation) Nanaimo, BC Cannabis Owned 2 60,000 High Park Holdings (Cannabis 2.0 Processing) London, ON Cannabis Leased 134,000 Manitoba Harvest (Hemp Processing) Winnipeg, MB Wellness Leased 15,000 Manitoba Harvest (Hemp Processing) St.
(Cannabis Cultivation) Leamington, ON Cannabis Owned 1 1,500,000 Broken Coast (Cannabis Cultivation) Duncan, BC Cannabis Owned 6 47,000 Avanti (EU-GMP Cannabis Processing and Lab) Brampton, ON Cannabis Owned 6 18,000 Broken Coast (Cannabis Cultivation) Nanaimo, BC Cannabis Owned 2 60,000 High Park Holdings (Cannabis 2.0 Processing) London, ON Cannabis Leased 134,000 Manitoba Harvest (Hemp Processing) Winnipeg, MB Wellness Leased 15,000 Manitoba Harvest (Hemp Processing) St.
We also lease space for other smaller offices in the United States, Canada, Europe and other parts of the world. We believe our facilities and committed leased space are currently adequate to meet our needs. As we continue to expand our operations, we may need to acquire or lease additional facilities or dispose of existing facilities. 39
We also lease space for other smaller offices in the United States, Canada, Europe and other parts of the world. We believe our facilities and committed leased spaces are currently adequate to meet our needs. As we continue to expand our operations, we may need to acquire or lease additional facilities or dispose of existing facilities. 38
Item 2. Properties. The following outlines our principal cultivation, manufacturing, storage facilities and brewpub by reporting segment as of May 31, 2024: Facility and Primary Use Location Reporting Segment Owned/ Leased Approximate Square Footage Canada: Aphria One (Cannabis Cultivation and Processing) Leamington, ON Cannabis Owned 1,400,000 Aphria Diamond Ltd.
Item 2. Properties. The following outlines our principal cultivation, manufacturing, storage facilities and brewpubs by reporting segment as of May 31, 2025: Facility and Primary Use Location Reporting Segment Owned/ Leased Approximate Square Footage Canada: Aphria One (Cannabis Cultivation and Processing) Leamington, ON Cannabis Owned 1,400,000 Aphria Diamond Ltd.
Duncan BC facility is recognized as an asset held for sale for the year ended May 31, 2024. 3 In Cantanhede, Portugal, we own one cultivation and manufacturing location used for medical cannabis and land adjacent to this facility for future expansion. 4 We recognize the property as an asset held for sale for the year ended May 31, 2024. 5 This facility is an outdoor growing facility.
The Duncan, BC facility was recognized as an asset held for sale and sold during the year ended May 31, 2025. 3 In Cantanhede, Portugal, we own one cultivation and manufacturing location used for medical cannabis as well as land adjacent to the facility for future expansion. 4 We recognize the property as an asset held for sale for the year ended May 31, 2025. 5 This facility is an outdoor growing facility. 6 This facility was sold during the year ended May 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The information called for by this item is incorporated herein by reference to Note 28, Commitments and Contingencies , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 40 PART II
Biggest changeItem 3. Legal Proceedings. The information called for by this item is incorporated herein by reference to Note 28, Commitments and Contingencies , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 39 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 40 PART II Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. [Reserved] 42 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 39 PART II Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 40 Item 6. [Reserved] 41 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 42 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMay 31, 2019 2020 2021 2022 2023 2024 Tilray Brands, Inc. $ 169.76 $ 43.99 $ 74.45 $ 18.50 $ 6.88 $ 7.42 Nasdaq Composite $ 95.24 $ 121.27 $ 175.70 $ 154.86 $ 165.81 $ 214.51 Horizons Marijuana Life Sciences Index $ 110.97 $ 44.93 $ 62.28 $ 23.71 $ 12.65 $ 9.97 This information under “Stock Performance Graph” is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of Tilray under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language in those filings.
Biggest changeMay 31, 2020 2021 2022 2023 2024 2025 Tilray Brands, Inc. $ 100.00 $ 172.39 $ 45.58 $ 16.95 $ 18.27 $ 4.37 Nasdaq Composite $ 100.00 $ 144.88 $ 127.31 $ 136.31 $ 176.35 $ 201.41 Horizons Marijuana Life Sciences Index $ 100.00 $ 154.83 $ 60.29 $ 30.33 $ 31.88 $ 21.95 This information under “Stock Performance Graph” is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of Tilray under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language in those filings.
Dividends We have not paid any cash dividends on our common stock to date. It is our current intention to not declare or pay any dividends for the foreseeable future as we intend to utilize all available funds and any future earnings to support operations and to finance the growth and development of our business.
Dividends We have not paid any cash dividends on our common stock to date. It is our current intention to not declare or pay any cash dividends for the foreseeable future as we intend to utilize all available funds and any future earnings to support operations and to finance the growth and development of our business.
Each issuance of securities described below, unless otherwise noted, were exempt from registration under Section 4(2) of the Securities Act 1933, as amended in transactions by an issuer not involving a public offering and no underwriter participated in the offer and sale of the securities issued pursuant to the following issuances, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.
Recent sales of unregistered securities; use of proceeds from registered securities Each issuance of securities described below, unless otherwise noted, were exempt from registration under Section 4(2) of the Securities Act 1933, as amended in transactions by an issuer not involving a public offering and no underwriter participated in the offer and sale of the securities issued pursuant to the following issuances, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the Nasdaq Global Select Market under the symbol “TLRY.” Holders As of July 25, 2024, there were approximately 900 holders of record of our common stock.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the Nasdaq Global Select Market and the TSX under the symbol “TLRY.” Holders As of July 24, 2025, there were approximately 1,008 holders of record of our common stock.
On June 30, 2023, Tilray entered into an assignment and assumption agreement with Double Diamond Holdings Ltd. (“DDH”), an Ontario corporation, pursuant to which, among other things, Tilray acquired from DDH a promissory note in the amount of $8,058 (the “Note”) payable by 1974568 Ontario Limited (“Aphria Diamond”). DDH is a joint venturer with Aphria Inc.
On September 16, 2024, Tilray entered into an assignment and assumption agreement with Double Diamond Holdings Ltd. (“DDH”), an Ontario corporation, pursuant to which, among other things, Tilray acquired from DDH a promissory note in the amount of $23,792 (the “Note”) payable by 1974568 Ontario Limited (“Aphria Diamond”). DDH is a joint venturer with Aphria Inc.
Our future ability to pay cash dividends on common stock is limited by the terms of the Aphria Diamond credit facility, as well as any future debt or preferred securities. Recent sales of unregistered securities; use of proceeds from registered securities.
Our future ability to pay cash dividends on common stock is limited by the terms of the Aphria Diamond credit facility, as well as any future debt or preferred securities.
The results assume that $100, which was invested on July 18, 2018 in our common stock and each of the indicated indexes.
The results assume that $100, which was invested on May 31, 2020 in our common stock and each of the indicated indexes.
Stock Performance Graph The following graph compares the performance of our common stock to the Nasdaq Composite and the Horizons Marijuana Life Sciences Index for the period from July 18, 2018, date of initial public offering, through May 31, 2024 in comparison to the indicated indexes.
See Note 31 (Subsequent events) for additional details. 40 Stock Performance Graph The following graph compares the performance of our common stock to the Nasdaq Composite and the Horizons Marijuana Life Sciences Index for the period from May 31, 2020 through May 31, 2025 in comparison to the indicated indexes.
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(Tilray’s wholly-owned subsidiary) in Aphria Diamond. As consideration for the Note, Tilray issued 5,004,735 shares of its common stock to DDH. On September 12, 2023, Tilray repurchased $20,000 of its TLRY 23 Notes for cancellation by issuing 7,000,000 shares and paying $610 of cash to settle both principal and accrued interest.
Added
(Tilray’s wholly-owned subsidiary) in Aphria Diamond. As consideration for the Note, Tilray issued 13,217,588 shares of its Common Stock to DDH. From January 28, 2025 to February 28, 2025, Tilray issued an aggregate of 27,136,770 shares of the Company’s common stock in exchange for $26.6 million aggregate principal amount of the Company’s 5.20% Convertible Senior Notes due June 1, 2027.
Removed
After cancellation, the outstanding principal balance of the TLRY 23 Notes was $107,331.
Added
From February 28, 2025 to March 10, 2025, Tilray issued an aggregate of up to 21,794,902 shares of the Company’s common stock in exchange for $14.6 million aggregate principal amount of the Company’s 5.20% Convertible Senior Notes due June 1, 2027.
Removed
On September 29, 2023, Tilray issued 1,032,616 shares of its common stock to HTI Investments MA LLC pursuant to the terms of a $50.0 million convertible promissory note originally issued by Tilray to HTI on July 12, 2022 and which was settled at maturity on August 31, 2023 as previously disclosed.
Added
From April 9, 2025 to April 21, 2025, Tilray issued an aggregate of 19,034,603 shares of the Company’s common stock in exchange for $9.4 million aggregate principal amount of the Company’s 5.20% Convertible Senior Notes due June 1, 2027.
Removed
On October 4, 2023, Tilray entered into an arrangement with MediPharm Labs Inc. (“MediPharm”) to acquire 100% ownership of 1000652011 Ontario Inc.. As consideration for such acquisition, Tilray issued 1,371,157 shares of its common stock to MediPharm.
Added
On June 16, 2025, Tilray issued 12,591,816 shares of the Company’s common stock in exchange for $5 million principal amount of the Company’s 5.20% Convertible Senior Notes due June 1, 2027.
Removed
On October 13, 2023, Tilray issued an additional 201,995 shares of its common stock to MediPharm to satisfy certain obligations under the acquisition arrangement. From December 15, 2023 to December 21, 2023, the Company exchanged $18,500 aggregate principal of its APHA 24 Notes for cancellation by issuing 9,601,538 shares.
Removed
On January 9, 2024, Tilray, entered into an assignment and assumption agreement with Double Diamond Holdings Ltd. (“DDH”) pursuant to which, among other things, Tilray acquired from DDH a promissory note in the amount of $26,135 payable by 1974568 Ontario Limited (“Aphria Diamond”).
Removed
As consideration for such note, Tilray issued 13,627,391 shares of its common stock to DDH, including any shares issued for downside protection provisions.
Removed
From January 10, 2024 to February 26, 2024, the Company exchanged $32,210 aggregate principal of its APHA 24 Notes for cancellation by issuing 17,626,714 shares. 41 On April 30, 2024, Tilray, entered into an assignment and assumption agreement with Double Diamond Holdings Ltd.
Removed
(“DDH”) pursuant to which, among other things, Tilray acquired from DDH a promissory note in the amount of $10,883 payable by 1974568 Ontario Limited (“Aphria Diamond”). As consideration for such note, Tilray issued 6,148,868 shares of its common stock to DDH, including any shares issued for downside protection provisions.
Removed
Between April 11, 2024 to May 17, 2024, the Company exchanged $85,700 aggregate principal of its APHA 24 Notes for cancellation by issuing 46,255,895 shares. Each of the foregoing issuances of securities was reported on a Form 8-K filed by the Company with the U.S. Securities and Exchange Commission.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company does not as of the date of this Form 10-K use foreign exchange contracts to hedge its exposure of its foreign currency cash flows as management has determined that this risk is not significant at this point in time. (d) Interest rate risk The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding debt.
Biggest changeAs of the date of this Form 10-K, the Company does not use foreign exchange contracts to hedge its exposure of its foreign currency cash flows as management has determined that this risk is not significant at this point in time. (d) Interest rate risk The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding debt.
The Company manages interest rate risk by restricting the type of investments and varying the terms of maturity and issuers of marketable securities. Varying the terms to maturity reduces the sensitivity of the portfolio to the impact of interest rate fluctuations. 68
The Company manages interest rate risk by restricting the type of investments and varying the terms of maturity and issuers of marketable securities. Varying the terms to maturity reduces the sensitivity of the portfolio to the impact of interest rate fluctuations. 67
(c) Currency rate risk As at May 31, 2024, a portion of the Company’s financial assets and liabilities held in Canadian dollars and Euros consist of cash and cash equivalents, convertible notes receivable, and long-term investments.
(c) Currency rate risk As of May 31, 2025, a portion of the Company’s financial assets and liabilities held in Canadian dollars and Euros consist of cash and cash equivalents, convertible notes receivable, and long-term investments.
The maximum credit exposure at May 31, 2024, is the carrying amount of cash and cash equivalents, accounts receivable, prepaids and other current assets and convertible notes receivable. All cash and cash equivalents are placed with major financial institutions in Canada, Australia, Portugal, Germany, Colombia, Argentina and the United States.
The maximum credit exposure as of May 31, 2025 is the carrying amount of cash and cash equivalents, accounts receivable, prepaids and other current assets and convertible notes receivable. All cash and cash equivalents are placed with major financial institutions in Canada, Australia, Portugal, Germany, Colombia, Argentina and the United States.
(b) Liquidity risk As at May 31, 2024, the Company’s financial liabilities consist of bank indebtedness and accounts payable and accrued liabilities, which have contractual maturity dates within one-year, long-term debt, and convertible debentures which are due in 2027.
(b) Liquidity risk As of May 31, 2025, the Company’s financial liabilities consist of bank indebtedness and accounts payable and accrued liabilities, which have contractual maturity dates within one-year, long-term debt, and convertible debentures which are due in June of 2027.
The Company manages its liquidity risk by reviewing its capital requirements on an ongoing basis. Based on the Company’s working capital position at May 31, 2024, management regards liquidity risk to be low.
The Company manages its liquidity risk by reviewing its capital requirements on an ongoing basis. Based on the Company’s working capital position as of May 31, 2025, management regards liquidity risk to be low.

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