Pomerantz LLP announces that a class action lawsuit has been filed against Tilray, Inc. (“Tilray” or the “Company”) (NASDAQ: TLRY) and certain of its officers. The class action, filed in United States District Court, for the Eastern District of New York, and indexed under 20-cv-01240, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Tilray securities between January 15, 2019 and March 2, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
Tilray was founded in 2013 and is headquartered in Toronto, Ontario. The Company engages in the research, cultivation, processing, and distribution of medical cannabis. The Company offers its products to patients, physicians, pharmacies, governments, and hospitals, and to researchers for commercial purposes, as well as compassionate access and clinical research applications.
On January 15, 2019, Tilray issued a press release announcing entry into a marketing and revenue sharing agreement with Authentic Brands Group (“ABG”), “an owner of a portfolio of global lifestyle and entertainment brands” (the “ABG Agreement”).
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the purported advantages of the ABG Agreement were significantly overstated; (ii) the underperformance of the ABG Agreement would foreseeably have a significant impact on the Company’s financial results; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On March 2, 2020, Tilray issued a press release announcing the Company’s financial results for the fourth quarter and full year 2019. Among other results, Tilray reported a net loss for the year of $321.2 million, or $3.20 per share, compared to $67.7 million, or $0.82 per share, for 2018. In addition, Tilray disclosed that “the Company recorded non-cash charges of $112.1 million related to impairment of the Authentic Brands Group LLC (‘ABG’) agreement as well as $68.6 million in inventory reserves.”
On this news, Tilray’s stock price fell $2.33 per share, or 15.18%, to close at $13.02 per share on March 3, 2020.