Tilray Brands, Inc.
For the period ended Aug 31, 2026. Filed Oct 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2026 · Filed Oct 8, 2026
TLRY$2.92+3.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-02-28; filed 2026-04-01.
0001437749-26-010907
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-31; filed 2026-10-08.
0001437749-26-032382
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 154 current paragraphs.
54 unchanged; 53 reworded; 46 added; 51 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 50 previous and 42 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
U.S. Beverage market trends:
Current report
U.K. Beverage market trends:
Current report
In the U.K., the beverage alcohol market remains highly competitive and continues to be impacted by evolving consumer preferences, cost pressures, and moderation trends. Consumers are increasingly seeking premium products, no and low-alcohol alternatives, and differentiated brand experiences across both retail and hospitality channels. Through BrewDog’s established brand portfolio, retail and e-commerce presence, and company-operated bar network, we believe we are well-positioned to compete in the U.K. market while focusing on core brand performance, operational efficiency, and selective innovation.
Current report
International cannabis market trends:
Current report
Recent changes to Germany’s statutory health insurance framework removed dried medical cannabis flower from the benefit entitlement under §31(6) SGB V. As a result, patients seeking to continue treatment with dried flower through the statutory system will generally be required to cover the cost privately. Standardized cannabis extracts and medicines containing dronabinol or nabilone remain eligible for reimbursement, subject to applicable requirements, including new conditions relating to prior treatment with an approved cannabis-based medicinal product. Certain implementation details and the treatment of previously approved therapies continue to be clarified.
Current report
We believe the breadth of our portfolio positions us well as these changes are implemented. Our established cannabis extract portfolio allows us to continue serving the reimbursed segment of the market, while our differentiated flower portfolio, which includes the ARX, Good Supply and Tilray Medical brands, provides a range of distinct product propositions for patients in the evolving self-pay market. Across the portfolio, we remain focused on delivering the quality, trust, safety and consistency expected from Tilray.
Current report
Spain. Spain introduced a formal medical cannabis framework in October 2025 (Royal Decree 903/2025), marking the first time cannabis-based treatments are systematically regulated within its healthcare system. The model is highly controlled and built around standardized cannabis preparations (magistral formulas) rather than licensed commercial products, with strict requirements on composition (THC/CBD), manufacturing quality, traceability, and pharmacovigilance under the supervision of the Spanish Medicines Agency (AEMPS).
Current report
Ukraine. Ukraine established a national medical cannabis framework in 2024, driven largely by the need to treat war‑related conditions such as chronic pain and post‑traumatic stress disorder (PTSD). The law (No. 3528‑IX), signed in February 2024 and effective from August 16, 2024, legalized cannabis for medical, scientific, and educational purposes, removing cannabis extracts from the list of prohibited substances and enabling their cultivation, manufacturing, import/export, and dispensing under strict licensing and quota controls. The regulatory system is highly pharmaceutical in nature: products must be registered as medicines or compounded in pharmacies using approved APIs, with full traceability, security requirements (e.g. controlled cultivation environments and surveillance), and oversight by the Ministry of Health and the State Medicines Service.
Current report
Panama. Panama established its medical cannabis framework under Law 242 of 2021, with further regulatory advancements in 2026 creating a structured pathway for physician authorization and patient registration. In July 2026, Tilray Medical commercially launched Tilray Oral Solution CBD100, manufactured at our EU-GMP-certified facilities in Portugal and supplied through our joint venture: Solana Life Group. The product is intended to be distributed by prescription through Farmacias Arrocha, expanding patient access to regulated, pharmaceutical-quality cannabinoid medicine through established healthcare channels.
Current report
Brazil. Brazil has recently implemented a major overhaul of its medical cannabis regulatory framework (2025–2026), transitioning from a temporary, import‑dependent model (RDC 327/2019) to a more comprehensive, pharmaceutical-grade system covering the entire value chain. The new rules adopted by ANVISA in early 2026 (notably RDC 1.012–1.015/2026) establish for the first time clear provisions for cultivation, manufacturing, research, and commercialization under strict licensing and oversight. Cannabis products are formally defined as industrialized medicinal products based primarily on CBD or CBD-dominant extracts, reinforcing a pharmaceutical approach and excluding non-medical formats (e.g. cosmetics or wellness products). The framework also introduces domestic cultivation (≤0.3% THC) for medical purposes, a regulatory sandbox for controlled pilot activities (including patient associations), and stricter GMP, traceability, and quality standards aligned with international norms.
Current report
France. France is approaching full approval of a permanent medical cannabis framework, following a multi‑year pilot (2021–2026) and a prolonged regulatory process. The government has already finalized the core legal architecture, including draft decrees covering prescription, production, and distribution, which have been submitted to the European Commission and reviewed by the Conseil d’État.
Current report
The forthcoming approval is expected to introduce a highly controlled, evidence-driven model: cannabis will be prescribed only as treatment for defined conditions (e.g. neuropathic pain, epilepsy, multiple sclerosis spasticity, oncology and palliative care), using standardized pharmaceutical products (oils, capsules, possibly vaporized formats) under strict ANSM oversight. Prescription will initially remain specialist-led, with potential gradual involvement of general practitioners, and products will require full pharmaceutical compliance (quality, traceability, GMP). A critical pending step is the HAS (Haute Autorité de Santé) evaluation, expected to determine reimbursement and clinical value in late 2026, which will ultimately define real patient access. If favorable, broad patient access is targeted for 2027, positioning France as a large regulated medical cannabis market.
Current report
U.S. cannabis market trends:
Current report
In April 2026, the U.S. Department of Justice (the “DOJ”) issued an order rescheduling FDA‑approved cannabis products and state‑licensed medical cannabis from Schedule I to Schedule III under the Controlled Substances Act. The DEA conducted an expedited administrative hearing to consider broader rescheduling. While the DOJ rescheduling order is facing legal challenges in the D.C. Circuit Court of Appeals, the only expected additional step in the proceedings was for the DEA Chief Administrative Law Judge (the “ALJ”) to issue his recommendation on rescheduling to the DEA, who would then make a final determination on policy. Most recently, the ALJ granted a motion for a stay filed by certain parties who claimed that the recent Government Accountability Office (“GAO”) report on drug scheduling should be entered into the record. Agreeing that it should be allowed in the record, the ALJ has requested briefing of the GAO report to be submitted in the proceedings.
Current report
As a global leader in medical cannabis, we believe we are well-positioned to participate in a federally compliant U.S. medical cannabis market, but we continue to monitor the regulatory landscape and legal challenges that are ongoing. We continue to believe that these recent efforts to reschedule cannabis from Schedule I to Schedule III under the Controlled Substances Act represent meaningful progress toward broader cannabis reform and have the potential to accelerate clinical research, broaden patient access, and support the development of a regulated, science-driven medical cannabis market in the United States.
Current report
Carlsberg. On February 5, 2026, we entered into an exclusive licensing agreement, which commences on January 1, 2027, with the Carlsberg Group, one of the world’s premier brewing organizations and among the largest globally by revenue. Under the terms of the agreement, Tilray has been granted a multi-year license to produce, market, sell and distribute Carlsberg®, Carlsberg Elephant®,1664®, and Kronenbourg 1664 Blanc® branded beers across all channels in the United States, beginning January 1, 2027. The agreement has an initial five-year term, with an automatic renewal for an additional five years subject to performance criteria.
Current report
BrewDog. Between March and April 2026, Tilray completed the Global BrewDog Acquisitions. See Note 7 (Business acquisitions) for details of the various transactions. As the only global craft beer brand, BrewDog transformed our beverage platform from a U.S. platform into a global platform and provided us with the international presence, team and capabilities to support the broader distribution of our U.S. beverage brands across key international markets, consistent with our previously disclosed ambition. In addition to the acquisition of BrewDog’s global businesses, the acquisition of BrewDog U.S. furthered our regional jewel strategy in the U.S. craft beer market by providing us with a footprint in the Midwest.
Current report
Lyphe. On April 15, 2026, Tilray acquired Lyphe, a UK-based medical cannabis clinic and digital pharmacy platform. Through the Lyphe Acquisition, the Company seeks to enhance access to medical cannabis in the UK while expanding its capabilities in dispensing traditional prescription medicines, thereby creating a seamless, digitally enabled patient experience.
Current report
HelloMD. On July 10, 2026, the Company acquired HelloMD, a direct-to-patient medical cannabis platform. Through the HelloMD Acquisition, the Company expects to expand its direct-to-patient capabilities and create a fully vertically integrated medical cannabis platform in Canada.
Current report
Seasonality
Current report
Certain of our reporting segments are affected by seasonal factors and, therefore, our results of operations for any interim period, including the three months ended August 31, 2026, are not necessarily indicative of the results that may be expected for the full fiscal year.
Current report
Beverage. Net revenue in our U.S. craft beer business has historically been highest in our fiscal fourth quarter, which ends on May 31 st. In that quarter, wholesalers and retailers increase their purchases and inventory levels ahead of the summer selling season and new products are introduced in connection with retailer spring shelf resets. Our fiscal third quarter has historically been our lowest quarter for beer net revenue. With respect to spirits, our business has historically benefited from purchases ahead of the winter holiday season in our fiscal second quarter and our third quarter benefits on net revenue after the calendar reset for graduated excise tax rates. We have a limited operating history with BrewDog, which we acquired in fiscal 2026 and which includes hospitality and U.K. retail operations. Its seasonal patterns may differ from those of our U.S. craft beer business.
Current report
Distribution. Our Distribution segment has historically experienced higher purchasing by wholesalers, distributors and pharmacy customers in our fiscal fourth quarter, ahead of the summer vacation period in Europe.
Current report
Cannabis. Our Canadian adult-use cannabis business has historically experienced lower net revenue in our fiscal third quarter as the winter weather moves customers away from dried flower and pre-rolls to vapes before reversing in the fourth quarter as the spring and summer months arrive. Similar to our Distribution segment, net revenue from our International medical cannabis business is historically higher due to the increased purchasing by wholesalers, distributors and pharmacy customers in our fiscal fourth quarter, ahead of the summer vacation. However, it can also fluctuate significantly from quarter to quarter due to the timing of the receipt of import and export permits, import quotas, product availability (where our cultivation experiences lower yield during the hot summer months) are impacted and regulatory developments in the jurisdictions in which we operate.
Current report
Seasonal patterns in our results may be affected, or obscured, by other factors. These include acquisitions and the integration of acquired brands, the timing of retailer shelf resets and of product launches, our portfolio and SKU rationalization initiatives, the timing of customer orders and shipments, weather, and changes in laws and regulations. As a result, period-to-period comparisons of our results may not be meaningful indicators of future performance.
Current report
Net revenue from our Beverage segment increased to $101.5 million for the three months ended August 31, 2026, compared to revenue of $55.7 million for the prior year period. Results for the current fiscal quarter include incremental net revenues of $55.9 million associated with the Global BrewDog Acquisitions completed during the fourth quarter of fiscal 2026. Excluding the impact of the Global BrewDog Acquisitions, the year-over-year decrease was primarily attributable to continued industry-wide challenges across the craft beer, spirits, and brewpub categories and broader competitive pressures, which resulted in lower volumes sold. Notwithstanding the current market challenges, the Global BrewDog Acquisitions significantly advance our long-term beverage strategy by transforming our platform from a predominantly U.S.-focused business into a global beverage platform with established operations and infrastructure, commercial capabilities and consumer reach across key international markets, which we believe positions the segment for future growth and enhanced scale.
Current report
***Revenue from Canadian adult-use cannabis:***During the three months ended August 31, 2026, our gross revenue from Canadian adult-use cannabis decreased to $53.6 million, compared to gross revenue of $64.1 million for the prior year period. On a constant currency basis, our gross revenue from Canadian adult-use cannabis decreased to $54.6 million for the three months ended August 31, 2026. The currency adjusted decrease in gross adult-use revenue for the three-month period was primarily driven by continued pricing pressure in the flower category, particularly within the mainstream and value segments where the Company maintains a significant market share. These decreases were partially offset by growth from innovation and recently launched products. In addition, certain inventory was redirected to international markets, which would otherwise have generated approximately $1.1 million of revenue in the Canadian market. Notably, we have continued to invest in our cultivation footprint, including the expansion of cultivation at our Quebec facility, to support demand across both Canadian and international markets. We remain encouraged by the early performance of key innovation initiatives and believe our investments in cultivation, brands and product development position the business to capitalize on future growth opportunities as market conditions evolve.
Current report
Our Wellness segment net revenue increased to $15.3 million for the three months ended August 31, 2026, compared to $15.2 million from the prior year period. On a constant currency basis for the three months ended August 31, 2026, Wellness segment net revenue increased to $15.4 million. Wellness net revenue remained largely unchanged, as growth from innovation and new product offerings was largely offset by lower e-commerce sales resulting from temporary supply constraints.
Current report
Beverage gross margin: For the three months ended August 31, 2026, our beverage segment generated gross margin of 41%, which increased from 38% generated in the prior year period. The increase was primarily driven by the inclusion of BrewDog, which generated a gross margin of approximately 46% and favorably impacted the segment’s overall gross margin. This benefit was partially offset by lower overhead absorption resulting from reduced volume in our legacy beverage operations, as well as higher input costs, particularly for aluminum and inbound freight.
Current report
Cannabis gross margin: For the three months ended August 31, 2026, our cannabis segment generated gross margin of 39%, which increased from 36% generated in the prior year period. The increase was primarily driven by operating efficiencies realized across our Canadian cannabis operations as well as favorable product mix, together with improved utilization of our cultivation facility in Portugal as we continued to scale international production. These benefits more than offset the impact of lower revenue and price compression, particularly within international cannabis markets.
Current report
Distribution gross margin: For the three months ended August 31, 2026, our distribution segment generated gross margin of 11%, and remained consistent from 11% generated in the prior year period. The comparability was affected by a $1.3 million in the prior year for the classification of certain packing labor costs within selling expenses rather than cost of goods sold. Excluding this impact, gross margin improved, driven primarily by a favorable product mix, including an approximately 12% increase in average selling price, and lower input costs resulting from cost-reduction initiatives.
Current report
Wellness gross margin: For the three months ended August 31, 2026, our wellness segment generated gross margin of 29%, which decreased from 32% in the prior year period. Gross margin decreased as a result of an unfavorable change in sales mix away from e-commerce and organic products to non-organic and white label.
Current report
Operating expenses are comprised of general and administrative, selling, amortization, marketing and promotion, research and development, change in fair value of contingent consideration, litigation costs, net of recoveries, restructuring costs and transaction costs, net. For the three months ended August 31, 2026, operating expenses increased by $46.2 million to $101.6 million when compared to $55.4 million for the prior year period. The increase was primarily driven by $32.0 million of incremental operating expenses associated with the Global BrewDog Acquisitions and the Lyphe Acquisition. The increase also reflected the absence of a $15.0 million gain from the change in fair value of contingent consideration relating to the Montauk acquisition recognized in the prior year period. These items are discussed in further detail below:
Current report
Salaries and wages increased by 20% during the three months ended August 31, 2026, when compared to the prior year period. This is primarily attributable to incremental salaries and wages of $7.4 million associated with the Global BrewDog Acquisitions and the Lyphe Acquisition completed during the fourth fiscal quarter of fiscal year 2026, as well as annual merit increases. This increase was partially offset due to a reduction of retention payments of $0.8 million compared to the prior year period.
Current report
Office and general increased by 95% during the three months ended August 31, 2026, when compared to the prior year period. The increase in the three months ended August 31, 2026 was driven by higher costs in the current year, including $7.1 million of incremental office and general expenses associated with the Global BrewDog Acquisitions and the Lyphe Acquisition completed during the fourth fiscal quarter of fiscal year 2026.
Current report
The Company recognized stock-based compensation expense of $6.6 million during the three months ended August 31, 2026, of which $0.9 million was recorded against accounts payable and accrued liabilities on the Consolidated Statements of Financial Position in connection with the Performance-Based Elective Settlement Award achieved (Note 14), compared to $5.1 million for the prior year period. Stock-based compensation expense is based on the adopted time-based vesting schedules and varies according to the assumptions used in the vesting model.
Current report
Insurance expense increased by $0.5 million for the three months ended August 31, 2026 to $2.9 million from $2.4 million for the prior year period. The increase in insurance expense for the three months ended August 31, 2026, was attributable to incremental insurance costs associated with the Global BrewDog Acquisitions.
Current report
Within the Beverage segment, restructuring activities primarily related to a business optimization plan designed to consolidate production, streamline and simplify operations, and improve the Beverage cost structure. Activities implemented under the plan included the closure of and the consolidation of volumes into certain brewery and related facilities. More specifically, in connection with our business optimization plan, we made decisions to cease production at our Terrapin facility in Athens, GA and our Hop Valley facility located in Eugene, OR, as well as executing an agreement to divest our Atwater business. Restructuring charges primarily consisted of employee termination severance and benefits, facility closure and exit costs, contract and other termination costs, costs associated with SKU rationalization activities, and other costs directly associated with the execution of the plan. As a result, during the three months ended August 31, 2026, the Company incurred $2.3 million of restructuring related expenses associated with these efforts. The Company expects these initiatives to be substantially completed by the end of fiscal 2027.
Current report
Transaction costs, net
Current report
Interest expense, net
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (51)
Previous report
Beverage market trends:
Previous report
International cannabis trends:
Previous report
BrewDog Acquisitions:
Previous report
Subsequent to the period ended February 28, 2026, on March 2, 2026, Tilray UK, a wholly owned subsidiary of the Company, entered into the BrewDog BASA. Under the BrewDog BASA, Tilray UK acquired certain business operations and assets of BrewDog plc and certain of its subsidiary undertakings (collectively, the “BrewDog Group”) through a pre-packaged administration process in Scotland under the Insolvency Act 1986, with the intent for Tilray UK to carry on the acquired business operations and assets as a going concern. The assets acquired included the UK Brewery, the online business, the retail business, 11 of the BrewDog strategic brewpubs in Scotland, England and Ireland and all the intellectual property rights relating to the BrewDog brand, including well known sub-brands such as Punk IPA, Hazy Jane, Wingman, Elvis Juice and Dead Pony Club. The purchase price was £33.0 million (approximately $44.1 million).
Previous report
In a separate transaction completed on March 9, 2026, the Company acquired BrewDog Brewing Australia Pty Ltd., which included BrewDog’s Australian brewery, along with two hospitality venues in Australia for a nominal consideration.
Previous report
On March 16, 2026, Tilray BrewDog U.S., Inc., a wholly-owned subsidiary of the Company, entered into an asset purchase agreement to acquire certain strategic BrewDog assets in the U.S., including a brewery, pub, and hotel in Columbus, Ohio, as well as pubs located in New Albany, Ohio, Cleveland, Ohio, and Las Vegas, Nevada. The purchase price for BrewDog’s U.S. assets is equal to $9.3 million.
Previous report
On March 23, 2026, the Company acquired 5 additional BrewDog brewpubs in Scotland and England for a purchase price of £0.3 million (approximately $0.5 million). See Note 26 (Subsequent Events).
Previous report
One of the world’s most recognized names in craft beer, BrewDog is a brand-powered, vertically integrated beverage and hospitality platform. Founded in 2007, BrewDog quickly became one of the largest independent craft beer brands in the United Kingdom with its portfolio of iconic craft, premium and low and no alcohol beer brands, including Punk IPA, Hazy Jane, Lost Lager and Wingman. From its beginnings in the UK, it developed its strong global brand awareness through its global expansion via international breweries, localized brewpubs and strategic partnerships.
Previous report
These acquisitions present an important step for the Company as it executes against its previously announced strategic initiative to expand its beverage platform into the international markets, The strong global awareness of the BrewDog brand, together with its international brewing infrastructure and experiential pubs, presents an opportunity for growth in the UK, Europe and previously untapped international markets, including the Asia Pacific region. Further, the acquisition of the BrewDog U.S. aligns with our “regional jewel” strategy as BrewDog has built a strong brand in Ohio, which supports and strengthens our presence in the Midwest and provides us with a highly visible presence in Las Vegas, including a flagship brewpub located on a premier stretch of the Las Vegas Strip.
Previous report
Beverage segment Project 420:
Previous report
In November 2020, we entered the beverage category with the acquisition of SweetWater Brewing Company, one of the largest independent craft brewers in the U.S. by volume, with the vision of creating a more diversified global lifestyle consumer products company.
Previous report
This initial acquisition provided us with a foundation to pursue additional acquisitions in the beverage category and scale our business on a national basis. We acquired Alpine Beer Company, Green Flash and Breckenridge Distillery in December 2021, Montauk Brewing Company in November 2022, Craft Acquisition I in October 2023 and Craft Acquisition II in September 2024.
Previous report
With Craft Acquisition I and Craft Acquisition II, we capitalized on opportunities to acquire additional beverage businesses that consisted of strong brands in decline due to lack of focus and in need of investment in order to promote growth, all at a significantly reduced purchase price. To support the growth of these acquired brands and establish a clear path to profitability, we implemented Project 420, which is a comprehensive plan covering (i) SKU optimization/rationalization; (ii) Geographic rationalization; (iii) Distributor rationalization; and (iv) synergy optimization plan through which we expect to invest in the acquired brands for growth and improve profitability:
Previous report
It is important to note, however, that there is a lag between the discontinuation of the SKUs and the associated reduction in revenue, which has an immediate effect, and the acceleration of the growth of our existing SKUs and the introduction of new innovation and the associated increase in revenue, which takes time due to retailer resets. We also expect these efforts will lead to improved sales and margins, with benefits realized through lower selling costs, as well as reduced requirements for working capital through inventory reductions and an improvement in our cash conversion cycle.
Previous report
Reverse Stock Split
Previous report
Effective December 2, 2025, we implemented a Reverse Stock Split of our outstanding shares of Common Stock, at a ratio of one-for-ten.
Previous report
No fractional shares were issued in connection with the Reverse Stock Split. Fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole share and stockholders received cash in lieu of any fractional shares that were created by the Reverse Stock Split, see Note 14 (Stockholder’s equity) for additional details. Each stockholder's percentage ownership interest in the Company and proportional voting power remained unchanged as a result of the Reverse Stock Split, except for adjustments that resulted from rounding fractional shares down to whole shares.
Previous report
All issued and outstanding Common Stock, per share amounts, and outstanding equity instruments and awards exercisable into Common Stock contained in the condensed interim consolidated financial statements of the Company and notes thereto have been retroactively adjusted to reflect the Reverse Stock Split for all current and prior periods presented.
Previous report
Net revenue from our Beverage segment decreased to $42.6 million and to $148.4 million for the three and nine months ended February 28, 2026, compared to revenue of $55.9 million and $175.0 million for the prior year periods. The decline was primarily attributable to continued industry-wide challenges across the craft beer, spirits, and brewpub categories and broader competitive pressures, which resulted in lower volumes sold. Additionally, the decline was driven in part by margin‑focused actions, which reduced net revenue by approximately $3.0 million and $13.6 million during the three and nine month periods, respectively. Lastly, the HD-D9 category was negatively impacted by U.S. federal legislation that was recently enacted which will restrict the future production and sale of our HD‑D9 beverages and reduced net revenue by approximately $1.0 million during the three and nine month periods, respectively.
Previous report
For the three and nine months ended February 28, 2026, these impacts were partially offset by the inclusion of sales from Craft Acquisition II, effective September 1, 2024, which were not reflected in the full comparative period and would have increased the nine month revenue for the period ended February 28, 2025 by approximately $13.6 million.
Previous report
***Revenue from Canadian adult-use cannabis:***During the three and nine months ended February 28, 2026, our gross revenue from Canadian adult-use cannabis increased to $52.6 million and to $179.1 million, compared to gross revenue of $49.3 million and $165.6 million for the prior year periods, respectively. On a constant currency basis, our gross revenue from Canadian adult-use cannabis increased to $50.2 million and increased to $178.4 million for the three and nine months ended February 28, 2026, respectively. The currency adjusted increase in gross adult‑use revenue for the three month period was primarily driven by a $2.7 million increase in the traditional pre‑roll category, reflecting the successful launch of innovation SKUs, including Good Supply Double Dutchies. This growth was partially offset by a $2.1 million decline in the whole flower category, primarily due to the commencement of strain rotation within our cultivation program, which temporarily constrained supply. In addition, certain inventory was redirected to international markets, which would otherwise have generated approximately $0.9 million of revenue in the Canadian market. For the nine month period, the currency adjusted increase in gross adult‑use revenue was predominantly attributable to a $7.3 million increase in traditional pre‑rolls, driven by the aforementioned product innovations, and a $1.7 million increase in whole flower sales, as the strain rotation did not begin until our third quarter. Notably, the Company has continued to invest in its cultivation footprint, including the decision to restart cultivation at its Quebec facility, to support growing demand in both the Canadian and international markets. Given the higher margins generally realized on international cannabis sales, the Company may, when advantageous, continue to allocate inventory to international markets, which could negatively impact Canadian adult‑use and wholesale cannabis revenue in future periods as the Company continues to scale its infrastructure.
Previous report
Our Wellness segment net revenue increased to $16.4 million and to $46.2 million for the three and nine months ended February 28, 2026 compared to $14.1 million and $43.5 million from the prior year periods, respectively. On a constant currency basis for the three and nine months ended February 28, 2026, Wellness segment net revenue increased to $16.1 million and to $46.1 million, respectively. The increase in revenue was driven by our strategic focus on value-add innovations, including high protein super-seeds, better-for-you breakfast products, better-for-you snacking, and the continued success of our Hi-Ball clean energy drinks which contributed approximately $0.5 million and $2.6 million of incremental revenue during the three and nine months, respectively. In addition, the acquisition of Blue Sky Hemp Venture’s customer list contributed to the growth of our ingredients sales channel by approximately $1.1 million and $3.0 million of incremental revenue during the three and nine month periods, respectively. The remaining Wellness portfolio contributed approximately $0.6 million of revenue growth during the three month period, reflecting improved demand across certain product lines. However, for the nine month period, revenue from the remaining sales channels declined by approximately $2.1 million, primarily due to a shift in one of our supply agreements within the Club retailer channel. We are actively addressing these challenges through targeted initiatives aimed at improving distribution, assortment optimization, and promotional execution across our Club and Retail sales channels.
Previous report
Gross profit, gross margin and adjusted gross margin**(1)**** for our reporting segments**
Previous report
Beverage gross margin: For the three and nine months ended February 28, 2026, our beverage segment generated gross margin of 32% and 34%, respectively, which decreased from 36% and 39% generated in the prior year periods, respectively. Adjusted gross margin was 32% and 34%, which decreased from 36% and 40% generated in the prior year periods, respectively. The change in the beverage gross margin and adjusted beverage gross margin for the three and nine months ended February 28, 2026 was driven by several factors, including our Craft Acquisition II, which historically has operated at a lower gross margin of approximately 25%, declining overhead utilization as our revenue levels have declined, higher input costs and timing delays in realizing the full benefits of our Project 420 cost savings initiatives. Additionally, increased discounting to support sales volume resulted in discounts of 7.2% for the three month period compared to 4.7% in the prior quarter, and 6.6% for the nine month period compared to 4.1% in the prior year period, which negatively impacted margins and was partially offset by reductions in marketing expenditures.
Previous report
Cannabis gross margin: For the three and nine months ended February 28, 2026, our cannabis segment generated gross margin of 40% and 38%, respectively, which decreased from 41% and remained consistent at 38% generated in the prior year periods, respectively. Although both cannabis net revenue and gross profit increased during the three and nine month periods, gross margin remained largely unchanged. This was primarily due to price compression in international markets, which negatively impacted international cannabis revenue during the three and nine month periods by approximately $7.0 million and $16.0 million, respectively, despite having increased the gram equivalents sold.
Previous report
Distribution gross margin: For the three and nine months ended February 28, 2026, our distribution segment generated gross margin of 12% and 12%, respectively, which increased from 9% and 11% generated in the prior year periods, respectively. The increase was primarily attributable to a favorable change in product mix, as evidenced by increases in average selling price of approximately 13% and 4% during the three and nine month periods, respectively, as well as initiatives undertaken to reduce input costs.
Previous report
Wellness gross margin: For the three and nine months ended February 28, 2026, our wellness segment generated gross margin of 33% and 32%, respectively, which increased from 32% and 31% in the prior year periods, respectively. Gross margin remained relatively consistent period over period as strategic price increases largely offset unfavorable changes in sales mix.
Previous report
Operating expenses are comprised of general and administrative, selling, amortization, marketing and promotion, research and development, change in fair value of contingent consideration, impairment of intangible assets and goodwill, other than temporary changes in fair value of convertible notes receivable, litigation costs, net of recoveries, restructuring costs and transaction costs (income), net. For the three and nine months ended February 28, 2026, operating expenses decreased by $730.6 million and by $795.2 million to $81.3 million and $216.5 million when compared to $811.9 million and $1,011.7 million for the prior year periods, respectively. These decreases were primarily attributable to $699.2 million of non‑cash impairments of goodwill and intangible assets and a $20.0 million other‑than‑temporary decrease in the fair value of the MedMen convertible note recorded in the prior year quarter, which did not repeat in the current period. In addition, the nine month period ended February 28, 2026, had lower amortization expense following the intangible asset impairment recorded during the fiscal quarter ended May 31, 2025, a $15.0 million gain related to the change in fair value of the Montauk contingent consideration, and lower selling and non‑recurring litigation, and restructuring costs. These decreases were partially offset by higher general and administrative costs.
Previous report
Salaries and wages remained consistent and increased by 3% during the three and nine months ended February 28, 2026, when compared to the prior year periods. Included in salaries and wages for the three and nine months ended February 28, 2026, were $0.5 million and $2.3 million, respectively, of retention payments compared to $1.5 million and $3.2 million for the prior year period, respectively. Additionally, period-over‑period variability was also impacted by changes in estimates related to discretionary compensation accruals.
Previous report
Office and general increased by 34% and by 3% during the three and nine months ended February 28, 2026, when compared to the prior year period respectively. The increase in the three and nine months ended February 28, 2026 was primarily due to a $0.7 million increase in bad debt provisions within the distribution business, the inclusion of a full period of costs related to Craft Acquisition II, which was effective September 1, 2024 and contributed approximately $0.6 million to the period‑over‑period variance, and the absence of a $0.3 million property tax refund recorded in the prior year quarter.
Previous report
The Company recognized stock-based compensation expense of $13.7 million and $31.1 million for the three and nine months ended February 28, 2026, compared to $4.0 million and $18.2 million for the prior year period respectively. Stock-based compensation expense is primarily driven by time-based vesting schedules and may vary based on assumptions used in valuation and vesting models. The increase during the three and nine month periods was primarily due to the recognition of expense related to performance-based awards following the establishment and approval of their performance criteria during the second fiscal quarter. As a result, performance-based awards contributed approximately $6.3 million and $12.1 million of expense during the three and nine month periods, respectively. Stock based compensation expense in the prior year periods was lower primarily due to the cancellation of certain performance-based awards.
Previous report
Insurance expense decreased by 36% and by 21% for the three and nine months ended February 28, 2026 to $1.9 million and $6.7 million from $2.9 million and $8.6 million for the prior year period, respectively due to lower premiums as a result of management’s decision to self-insure a portion of our property and casualty insurance.
Previous report
For the year ended, May 31, 2025, the Company assessed the estimated value of the contingent consideration liability as $15.0 million, which was estimated to be achieved based on management’s forecast, applying a probability of achievement of 100% for the sales volume target and 0% on the remaining criteria, which was not expected to be achieved as EBITDA targets were not forecasted to be met.
Previous report
Impairments
Previous report
During the fiscal quarter ended February 28, 2026, the Company assessed for indicators of impairment and concluded that there were no indicators and accordingly, no further impairment testing was required and no impairment charges were recognized during the period.
Previous report
In the prior year period, based upon a combination of factors including a sustained decline in the Company’s market capitalization stemming from the uncertainty resulting from certain changes in U.S. global economic policy, including slower than anticipated progress in global cannabis legalization and overall declines in the craft beer industry sector, the Company concluded that it is more likely than not, that the fair value of our reporting units were less than their carrying amounts as of February 28, 2025. Accordingly, the Company utilized the income approach, which uses future discounted cash flows, to determine the fair value of each reporting unit. As a result, the Company recorded non-cash impairment charges of $570.0 million of cannabis goodwill, $100.0 million of beverage goodwill, $25.0 million of wellness goodwill and $4.2 million of distribution goodwill for the three and nine months ended February 28, 2025. The non-cash impairment charge had no impact on the Company’s compliance with debt covenants, its cash flows or available liquidity.
Previous report
In the Company’s cannabis goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 12.00%, a terminal growth rate of 5%, and an average revenue growth rate of 34% over 5 years, based on an 88% and 40% average probability of anticipated EU and U.S. cannabis legalization, respectively and/or changes in drug policy in various countries within the next 5 years. A 1% increase in the discount rate would result in an additional $285.0 million in impairment, a 1% decrease in the terminal growth rate would result in an additional $210.0 million in impairment, a 5% decrease in the average growth rate would result in an additional $170.0 million in impairment, a 5% decrease in the probability of EU cannabis legalization would result in an additional $80.0 million in impairment and a 5% decrease in the probability of US cannabis legalization would result in an additional $7.0 million in impairment. Changes to those probabilities resulting in continued delays in or cessation of legalization of cannabis within the United States and internationally, or adverse regulatory changes to existing legislation, could have an unfavorable impact on the estimated future cash flows, and ultimately, the fair value of the cannabis reporting unit, which may result in a material impairment expense recognized in future reporting periods.
Previous report
In the Company’s beverage goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 9.25%, a terminal growth rate of 2%, and an average revenue growth rate of 12% over 5 years. A 1% increase in the discount rate would result in an additional $70.0 million in impairment, a 1% decrease in the terminal growth rate would result in an additional $50.0 million in impairment and a 1% decrease in the average growth rate would result in an additional $40.0 million in impairment.
Previous report
In the Company’s wellness goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 10.50%, a terminal growth rate of 2%, and an average revenue growth rate of 7% over 5 years. A 1% increase in the discount rate would result in an additional $5.0 million in impairment, a 1% decrease in the terminal growth rate would result in an additional $3.0 million in impairment and a 1% decrease in the average growth rate would result in an additional $2.0 million in impairment.
Previous report
In the Company’s distribution goodwill assessment performed during the three and nine months ended February 28, 2025, the Company recorded $4.2 million of impairments which brought the remaining distribution goodwill balance to $nil.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Reworded paragraphs (53)
Previous wording
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. Tilray’s mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy, wellness and create memorable experiences.
Current wording
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. Tilray’s mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy and wellness, while creating memorable experiences that bring people together.
Previous wording
Our overall strategy is to leverage our brands, infrastructure, expertise and capabilities to drive revenue growth in the industries in which we compete, achieve industry-leading profitability and build sustainable, long-term shareholder value. 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. In addition, we are relentlessly focused on managing our cost structure and expenses in order to maintain our strong financial position. Finally, our experienced leadership team provides a strong foundation to accelerate our growth. 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 and better-for-you products, all of whom apply an innovative and consumer-centric approach to our businesses.
Current wording
Our overall strategy is to leverage our brands, infrastructure, expertise and capabilities to drive revenue growth in the industries and channels in which we compete, achieve industry-leading profitability and build sustainable, long-term shareholder value. 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. In addition, we are relentlessly focused on managing our cost structure and expenses in order to expand margins and maintain our strong financial position. Finally, our experienced leadership team provides a strong foundation to accelerate our growth. 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 and better-for-you products, all of whom apply an innovative and consumer-centric approach to our businesses.
Previous wording
In the spirits category, Breckenridge Distillery combines premium craftsmanship, award-winning quality, and experiential tourism appeal, reinforcing its niche as a lifestyle-driven spirits brand. Recently included in Newsweek's “Best Bourbon 2026” list, the distillery has earned multiple prestigious accolades across Whiskey, Gin, and Vodka, including three Icons of Whisky awards, ten Best American Blended Whiskey honors at the World Whiskies Awards, and recognition as Colorado Distillery of the Year. Breckenridge Distillery products are available in all 50 states, with continued planned expansion and product innovations. Recent launches include Mock One – a non-alcoholic spirits line, Mountain Shot – flavored whiskey in convenient pouches, and Casa Breck Tequila, all underscoring our commitment to innovation and evolving consumer preferences. Despite prevailing challenges within the overall spirits market, we believe our focus on whiskey—a resilient segment—combined with our award-winning portfolio and innovative product introductions, positions Breckenridge Distillery for sustained growth and enhanced market presence.
Current wording
In the spirits category, Breckenridge Distillery combines premium craftsmanship, award-winning quality, and experiential tourism appeal, reinforcing its positioning as a lifestyle-driven spirits brand. Recently included in Newsweek's “Best Bourbon 2026” list, the distillery has earned multiple prestigious accolades across Whiskey, Gin, and Vodka, including three Icons of Whisky awards, ten Best American Blended Whiskey honors at the World Whiskies Awards, and recognition as Colorado Distillery of the Year. Breckenridge Distillery products are available in all 50 states, with continued planned expansion into other product categories and product innovations. Recent launches include Mock One, a non-alcoholic spirits line, Mountain Shot, flavored whiskey in convenient pouches, and Casa Breck Tequila, all underscoring our commitment to innovation and evolving consumer preferences. Despite prevailing challenges within the overall spirits market, we believe that our award-winning portfolio and innovative product introductions positions Breckenridge Distillery for sustained growth and enhanced market presence.
Previous wording
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:
Current wording
The cannabis industry in Canada continues to evolve given how nascent the industry is with federal legalization of adult-use cannabis occurring approximately eight 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:
Previous wording
We are a global leader in the development, production, distribution, marketing and sale of pharmaceutical-grade medical cannabis products. The cannabis industry in Europe is still in its early stages of development and countries within Europe are at different stages of medical cannabis legalization. Meaningful progress in the legalization and regulation of cannabis for medical purposes, has now taken place in more than 21 countries representing a population of more than 526 million people (Germany, UK, Italy, Poland, Netherlands, Czech Republic, Greece, Portugal, Austria, Switzerland, Denmark, Croatia, Malta, Luxembourg, Ukraine, Sweden, Norway, Türkiye, Ireland, Spain and Israel). Beyond this, some countries have expressed a clear political ambition to legalize adult-use cannabis (Portugal and Luxembourg), some are engaging in programs for adult-use legalization (Germany, Netherlands, Malta, Czech Republic and Switzerland) and some are debating regulations for cannabinoid-based medicine (France). 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. This is evidenced by the cannabis regulations in Germany adopted on April 1, 2024, which we believe will serve as a catalyst for continued changes in drug policy throughout Europe. Outside of Europe and North America, the cannabis industry is also continuing to develop with Australia representing one of the larger markets and with some Latin American countries also growing their respective medical cannabis markets, such as Argentina, Panama, Colombia and Brazil.
Current wording
We are a global leader in the development, production, distribution, marketing and sale of pharmaceutical-grade medical cannabis products. The cannabis industry in Europe is still in its early stages of development and countries within Europe are at different stages of medical cannabis legalization. Meaningful progress in the legalization and regulation of cannabis for medical purposes, has now taken place in more than 20 countries representing a population of more than 524 million people (Germany, UK, Italy, Poland, Netherlands, Czech Republic, Greece, Portugal, Austria, Switzerland, Denmark, Croatia, Malta, Luxembourg, Ukraine, Sweden, Norway, Türkiye, Ireland and Spain). Beyond this, some countries have expressed a clear political ambition to legalize adult-use cannabis (Portugal and Luxembourg), some are engaging in programs for adult-use legalization (Netherlands and Switzerland) and some are debating regulations for cannabinoid-based medicine (France). 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. This is evidenced by the cannabis regulations in Malta in 2021, in Czech Republic in 2026 and more concretely in Germany in 2024, which we believe will serve as a catalyst for continued changes in drug policy throughout Europe. Outside of Europe and North America, the cannabis industry is also continuing to develop with Australia and Israel representing some of the larger markets and with some Latin American countries also growing their respective medical cannabis markets, such as Argentina, Panama, Colombia and Brazil.
Previous wording
We continue to believe that Tilray remains uniquely well-positioned to maintain and gain significant market share in the markets in which we participate. We benefit from our end-to-end vertically-integrated infrastructure in major markets and well-placed investments, which are comprised of two EU-GMP cultivation facilities located in Portugal and Germany; our fully owned route-to-market encompassing sales, marketing and distribution infrastructure in Germany, Australia and Italy; a network of leading distributors who we work with in the various other countries in which we participate; and, our extensive genetics portfolio and demonstrated commitment and expertise related to the cultivation and production of high-quality, safe cannabis products. Tilray’s International business also benefits from the depth and breadth of knowledge, experience, relationships and infrastructure we have gleaned from our leading participation and investment into the Canadian medical and adult-use markets. Tilray is proudly pioneering the effort to further understand the therapeutic value of cannabis through strategic partnerships with leading research institutions globally where Tilray is currently supporting clinical trials around the world studying the efficacy of cannabis in treading various indications. We believe that these assets and attributes, combined with our ability to navigate complex regulatory environments, will continue to drive our leadership in international medical markets and allow us to successfully enter new markets as they adopt medical cannabis and potentially adult-use regulations and may also serve to support a potential U.S. participation.
Current wording
We continue to believe that Tilray remains uniquely well-positioned to maintain and gain significant market share in the markets in which we participate. We benefit from our end-to-end vertically-integrated infrastructure in major markets and well-placed investments, which are comprised of two EU-GMP cultivation facilities located in Portugal and Germany; our fully owned route-to-market encompassing sales, marketing and distribution infrastructure in Germany, Australia and Italy; a network of leading distributors who we work with in the various other countries in which we participate; and, our extensive genetics portfolio and demonstrated commitment and expertise related to the cultivation and production of high-quality, safe cannabis products. Tilray’s International business also benefits from the depth and breadth of knowledge, experience, relationships and infrastructure we have gleaned from our leading participation and investment into the Canadian medical and adult-use markets. Tilray is proudly pioneering the effort to further understand the therapeutic value of cannabis through strategic partnerships with leading research institutions globally where Tilray is currently supporting clinical trials around the world studying the efficacy of cannabis in treating various indications. We believe that these assets and attributes, combined with our ability to navigate complex regulatory environments, will continue to drive our leadership in international medical markets and allow us to successfully enter new markets as they adopt medical cannabis and potentially adult-use regulations and may also serve to support a potential U.S. participation.
Previous wording
We continue to believe that Tilray is well-positioned in Germany, especially considering the enactment of MedCanG and given that we are one of only three manufacturers of medical cannabis in Germany since 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. Said license improves our ability to meet the needs of patients and provides cannabis of the utmost quality and enhanced availability to a broader market.
Current wording
We continue to believe that Tilray is well-positioned in Germany, particularly following the enactment of MedCanG and given our domestic cultivation capabilities. 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, enhancing our ability to serve patients with high-quality products and improved availability.
Previous wording
United Kingdom. Since November 2018, doctors in the UK have been able to prescribe medical cannabis for medicinal use for patients with medical conditions that had failed to respond to first-line medications. The market today is predominantly all self-pay and prescriptions are facilitated by private clinics. Today, we supply the UK market with mainly whole flower products from brands such as Good Supply through our distributor partners with sights on growing our portfolio to extracts and other formats.
Current wording
United Kingdom. Since November 2018, doctors in the U.K. have been able to prescribe medical cannabis for medicinal use for patients with medical conditions that had failed to respond to first-line medications. The market today is predominantly all self-pay and prescriptions are facilitated by private clinics. Today, we supply the U.K. market with mainly whole flower products from brands such as Good Supply through our distributor partners with sights on growing our portfolio to extracts and other formats. The Lyphe Acquisition brings deep clinical expertise and a strong patient-first approach that immediately strengthens our capabilities in the U.K.
Previous wording
Tilray Wellness’s branded business continues to grow across brick-and-mortar retail as well as ecommerce, which we believe further establishes its leading market share position in better-for-you categories. The Company continues to focus on value-added innovation within natural and organic food and beverages across branded and ingredient sales. We continue to participate in multiple growing categories including super-seeds, better for you breakfast, better for you snacking, and natural energy drinks. Within our Ingredients sales business, we have expanded our range of offerings in hemp protein and hemp oil, helping us further develop our business in North America and Asia.
Current wording
Tilray Wellness’ branded business continues to grow across brick-and-mortar retail as well as e-commerce, which we believe further establishes its leading market share position in better-for-you categories. The Company continues to focus on value-added innovation within natural and organic food and beverages across branded and ingredient sales. We continue to participate in multiple growing categories including super-seeds, better-for-you breakfast, better-for-you snacking, as well as functional beverages and natural energy drinks. Within our Ingredients sales business, we have expanded our range of offerings in hemp protein and hemp oil, helping us further develop our business in North America and Asia.
Previous wording
We strive to continue to expand our business, on a consolidated basis, through a combination of organic growth and acquisition. 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. In addition, we have exited certain businesses and continue to evaluate certain businesses within our portfolio that are dilutive to profitability and cash flow. 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. For the nine months ended February 28, 2026, we incurred $2.9 million of transaction expenses, as discussed further below in the results of operations assessment.
Current wording
We strive to continue to expand our business, on a consolidated basis, through a combination of organic growth and acquisition. 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. In addition, we have exited certain businesses and continue to evaluate certain businesses within our portfolio that are dilutive to profitability and cash flow. 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. For the three months ended August 31, 2026, we incurred $4.8 million of transaction costs, net. For the three months ended August 31, 2025, we incurred $0.4 million of transaction costs, net. The following strategic transactions completed during the fourth quarter of fiscal year 2026 continue to have a meaningful impact on our business, growth strategy and operating results:
Previous wording
Our results of operations may continue to be affected by economic, political, legislative, regulatory, legal actions, global volatility and general market disruption resulting from geopolitical tensions, such as Russia's continued incursion into Ukraine, the ongoing events in the Middle East, including the conflict involving Iran, and political uncertainty in certain countries in Europe. Escalation of hostilities in the Middle East, including involving Iran, could further disrupt global energy markets, fuel prices, transportation networks, and supply chains, particularly in Europe, which may indirectly impact operating costs and consumer demand. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, interest and monetary exchange rates, government fiscal policies, and the recent economic uncertainties resulting from certain changes in U.S. global economic policy, including changes on global trade policies can have a significant effect on operations. More specifically, there are no expected impacts on revenue from the recently enacted U.S. tariffs and foreign enacted retaliatory tariffs (“Tariffs”). 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.
Current wording
Our results of operations may continue to be affected by economic, political, legislative, regulatory, legal actions, global volatility and general market disruption resulting from geopolitical tensions, such as Russia’s continued incursion into Ukraine, the ongoing events in the Middle East, including the conflict involving Iran, and political uncertainty in certain countries in Europe. Escalation of hostilities in the Middle East, including Iran, could further disrupt global energy markets, fuel prices, transportation networks, and supply chains, which may indirectly impact operating costs and consumer demand. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, interest and monetary exchange rates, government fiscal policies, and the recent economic uncertainties resulting from certain changes in U.S. global economic policy, including changes on global trade policies can have a significant effect on operations. More specifically, there are limited expected impacts on revenue from the recently enacted U.S. tariffs and foreign enacted retaliatory tariffs in most reporting segments. The Company is actively monitoring developments related to these tariffs, evaluating potential impacts on its business, and adapting its operations and mitigation strategies as appropriate. From a cost perspective, we believe the recently enacted tariffs have and may continue to have an impact on input materials such as aluminum, hops, barley, malt and vape componentry, which are partially imported. We intend to mitigate these impacts to the extent possible.
Previous wording
In addition, U.S. federal regulatory developments regarding cannabis rescheduling represent a significant shift in the political and legislative environment. This regulatory evolution is expected to create a more credible framework for medical cannabis research, clinical development, and compliance, aligning with Tilray’s established global expertise in regulated medical cannabis markets; although, there are no assurances whether such rescheduling will be implemented as and when anticipated. The Company intends to leverage its proven compliance infrastructure, scientific knowledge, and operational scale to expand responsibly in the U.S. market, introducing medical-grade cannabis products in targeted therapeutic formats. While these developments present significant long-term growth opportunities, they also introduce new regulatory complexities and potential risks that we will continue to monitor closely.
Current wording
In addition, the recent U.S. federal regulatory developments regarding cannabis rescheduling represent a significant shift in the political and legislative environment. This evolution is expected to lead to a legitimate regulatory framework for the provision and use of medical cannabis as a therapy for a multitude of conditions and disease states, bringing U.S. drug policy in line with the drug policies of other countries around the world today. We expect that this will also lead to more research, clinical development, and education, aligning closely with Tilray’s established global expertise in regulated medical cannabis markets. During fiscal 2027, the U.S. Drug Enforcement Administration conducted administrative hearings regarding the proposed transfer of marijuana from Schedule I to Schedule III under the Controlled Substances Act and it was expected that the ALJ would issue his recommendation imminently. However, in response to a motion for a stay filed by certain parties who claimed that the recent Government Accountability Office (“GAO”) report on drug scheduling should be entered into the record, the ALJ granted the stay, thereby extending the hearings. We continue to monitor these developments and, with more clarity on the regulatory framework and the outcomes of the legal challenges, we intend to leverage our proven compliance infrastructure, scientific knowledge, and operational scale to expand responsibly in the U.S. market, introducing medical-grade cannabis products in targeted therapeutic formats. While these developments present significant long-term growth opportunities, they also introduce new regulatory complexities and potential risks that we will continue to monitor closely. These developments did not have any immediate impact on our financial results.
Previous wording
These non-GAAP financial measures should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America, (“GAAP”). These financial measures, which may be different than similarly titled financial measures used by other companies, are presented to help investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Please see “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” below for reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as a discussion of our adjusted gross margin, adjusted gross profit and adjusted EBITDA measures and the calculation of such measures.
Current wording
These non-GAAP financial measures should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”). These financial measures, which may be different than similarly titled financial measures used by other companies, are presented to help investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Please see “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” below for reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as a discussion of our adjusted EBITDA measure and the calculation of such measure.
Previous wording
Cash, restricted cash and Marketable Securities
Current wording
Cash and cash equivalents, restricted cash and Marketable Securities
Previous wording
The Company combines the Cash and cash equivalent financial statement line item, the restricted cash financial statement line and the Marketable securities financial statement line item as an aggregate total as reconciled in the liquidity and capital resource section below. 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 combining these three GAAP metrics.
Current wording
The Company combines the Cash and cash equivalents financial statement line item, the restricted cash financial statement line and the Marketable securities financial statement line item as an aggregate total as reconciled in the liquidity and capital resource section below. 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 combining these three GAAP metrics.
Previous wording
(1)Adjusted EBITDA, adjusted gross profit (excluding PPA step-up) and adjusted gross margin (excluding PPA step-up) for each of our segments, and cash, restricted cash and marketable securities are non-GAAP financial measures. See “Use of Non-GAAP Measures” above for a discussion of these Non-GAAP measures and “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.”
Current wording
(1)Adjusted EBITDA and cash, restricted cash and marketable securities are non-GAAP financial measures. See “Use of Non-GAAP Measures” above for a discussion of these Non-GAAP measures and “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.”
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, our reporting segments net revenue was comprised of net revenues from our beverage, cannabis, distribution, and wellness operations as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, our reporting segments net revenue was comprised of net revenues from our beverage, cannabis, distribution, and wellness operations as follows:
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, our reporting segment net revenue on a constant currency(1) basis was as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, our reporting segment net revenue on a constant currency(1) basis was as follows:
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, our geographic net revenue was as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, our geographic net revenue was as follows:
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, our geographic net revenue on a constant currency(1) basis was as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, our geographic net revenue on a constant currency(1) basis was as follows:
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, cannabis net revenue based on market channel was as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, cannabis net revenue based on market channel was as follows:
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, cannabis net revenue based on market channel on a constant currency(1) basis was as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, cannabis net revenue based on market channel on a constant currency(1) basis was as follows:
Previous wording
***Revenue from Canadian medical cannabis:***Gross revenue from Canadian medical cannabis increased to $6.0 million and decreased to $18.4 million for the three and nine months ended February 28, 2026 compared to gross revenue of $5.8 million and $18.8 million for the prior year periods, respectively. On a constant currency basis, gross revenue from Canadian medical cannabis decreased to $5.7 million and to $18.3 million for the three and nine months ended February 28, 2026, respectively. The decrease in gross revenue from medical cannabis, on a constant currency basis, was primarily driven by uninsured patient attrition to the adult-use recreational market, which was partially offset by new insured patient acquisition.
Current wording
***Revenue from Canadian medical cannabis:***Gross revenue from Canadian medical cannabis decreased to $4.7 million for the three months ended August 31, 2026, compared to gross revenue of $6.1 million for the prior year period. On a constant currency basis, gross revenue from Canadian medical cannabis decreased to $4.8 million for the three months ended August 31, 2026. The decrease in gross revenue from medical cannabis, on a constant currency basis, was primarily driven by a reduction in the Veterans Affairs Canada reimbursement ceiling from CAD $8.50 to CAD $6.00 per gram, effective April 1, 2026, as enacted under the Canadian federal government’s Budget 2025, which reduced revenue by approximately $1.0 million during the fiscal quarter. The remaining decrease was attributed to uninsured patient attrition to the adult-use recreational market.
Previous wording
***Wholesale cannabis revenue:***Gross revenue from wholesale cannabis decreased to $1.2 million and to $6.7 million and for the three and nine months ended February 28, 2026, compared to gross revenue of $3.9 million and $16.0 million for the prior year periods respectively. On a constant currency basis, gross revenue from wholesale cannabis decreased to $1.1 million and to $6.7 million for the three and nine months ended February 28, 2026, respectively. Due to the transition by many licensed producers in the Canadian market to asset-light business models, the Canadian cannabis industry has experienced a reduction in excess inventory resulting in price increases in the B2B market. As a result of this shift in market dynamics and demand, we continue to evaluate the market and may opportunistically sell into the wholesale market where it makes sense. Specifically, during the three and nine months ended February 28, 2026, wholesale cannabis revenue declined compared to the prior year periods as the Company strategically redirected product to other markets, resulting in a 49% and 47% decrease in wholesale gram equivalents sold, respectively.
Current wording
***Wholesale cannabis revenue:***Gross revenue from wholesale cannabis decreased to $0.7 million for the three months ended August 31, 2026, compared to gross revenue of $4.2 million for the prior year period. On a constant currency basis, gross revenue from wholesale cannabis decreased to $0.7 million for the three months ended August 31, 2026. As wholesale market dynamics evolve, we continue to evaluate opportunities to sell into the wholesale market or allocate product to international markets and other sales channels based on demand and profitability. Specifically, during the three months ended August 31, 2026, wholesale cannabis revenue declined compared to the prior year period as the Company strategically redirected product to other markets, resulting in a 70% decrease in wholesale gram equivalents sold.
Previous wording
International cannabis revenue:** **Net revenue from International cannabis increased to $24.1 million and to $57.7 million for the three and nine months ended February 28, 2026, compared to net revenue of $13.9 million and $41.0 million for the prior year periods, respectively. On a constant currency basis, given the strengthening of the Euro against the U.S. Dollar when compared to the prior year quarter, net revenue from international cannabis increased to $21.4 million and increased to $53.1 million for the three and nine months ended February 28, 2026, respectively. The increase in net revenue from International cannabis markets during the three and nine months ended February 28, 2026, was primarily attributable to growth in the German medical cannabis market, which increased by $4.0 million and $9.8 million, respectively, the receipt of previously backlogged permits, and an enhanced supply chain. During the three month period, this growth was further supported by a $4.4 million increase in Poland, driven by patient adoption of an in‑person prescription model, and a $1.7 million increase in the United Kingdom through our targeted expansion into emerging markets. Despite increased gram equivalents sold, international cannabis revenue was negatively impacted by price compression of approximately $7.0 million and $16.0 million for the three and nine months ended February 28, 2026, respectively. Notwithstanding this pricing pressure, international cannabis sales continue to generate higher margins than Canadian cannabis sales, and the Company remains focused on optimizing its product mix and geographic allocation to maximize profitability.
Current wording
International cannabis revenue:** **Net revenue from International cannabis increased to $16.2 million for the three months ended August 31, 2026, compared to net revenue of $13.4 million for the prior year period. On a constant currency basis, net revenue from international cannabis increased to $16.3 million for the three months ended August 31, 2026 and was primarily attributable to growth in the German medical cannabis market, which increased by $2.9 million as a result of increased patient demand. This growth was further supported by a $1.0 million increase in the United Kingdom through the Lyphe Acquisition. Despite increased gram equivalents sold, international cannabis revenue was negatively impacted by price compression of approximately $8.8 million in the quarter. Lastly, international cannabis revenue may fluctuate from quarter to quarter based upon the timing of the receipt of export/import permits as well as the timing of shipments from one quarter to the next.
Previous wording
Net revenue from our Distribution segment increased to $83.0 million and increased to $242.3 million for the three and nine months ended February 28, 2026, compared to revenue of $61.5 million and $197.2 million for the prior year periods, respectively. On a constant currency basis, given the change in the Euro and Argentine Peso against the U.S. Dollar in the fiscal quarter, revenue from Distribution increased to $74.0 million and $223.6 million for the three and nine months ended February 28, 2026, respectively. The increase in Distribution revenue for the three month period was primarily driven by a focus on competitive pricing, as evidenced by a 13% increase in average selling price, and a 7% increase in units sold, reflecting greater emphasis on higher‑velocity SKUs, as well as favorable foreign exchange impacts. The increase in Distribution revenue for the nine month period was primarily attributable to a 4% increase in average selling price, an 11% increase in volume, and favorable foreign exchange impacts.
Current wording
Net revenue from our Distribution segment increased to $84.3 million for the three months ended August 31, 2026, compared to revenue of $74.0 million for the prior year period. On a constant currency basis, revenue from Distribution increased to $85.2 million for the three months ended August 31, 2026. The increase in Distribution revenue for the fiscal year was primarily driven by a focus on competitive pricing and product mix, as evidenced by a 12% increase in average selling price, and a 2% increase in units sold.
Previous wording
For the three and nine months ended February 28, 2026 and February 28, 2025, respectively, our gross profit and gross margin were as follows:
Current wording
For the three months ended August 31, 2026 and August 31, 2025, respectively, our gross profit and gross margin were as follows:
Previous wording
During the three and nine months ended February 28, 2026 and February 28, 2025, respectively, the changes in operating expenses were as follows:
Current wording
During the three months ended August 31, 2026 and August 31, 2025, respectively, the changes in operating expenses were as follows:
Previous wording
During the three and nine months ended February 28, 2026 and February 28, 2025, respectively, the changes in general and administrative costs when compared to the prior year period were as follows:
Current wording
During the three months ended August 31, 2026 and August 31, 2025, respectively, the changes in general and administrative costs when compared to the prior year period were as follows:
Previous wording
Rent expense increased by 8% and decreased by 6% for the three and nine months ended February 28, 2026 to $0.8 million and $2.9 million compared to $0.7 million and $3.0 million for the prior year periods, respectively. Rent expense is predominantly comprised of operating lease expenses for our brew pubs and office spaces and varies period-over-period based on lease amortization schedules and common area maintenance costs.
Current wording
Rent expense increased by 151% for the three months ended August 31, 2026 to $2.2 million compared to $0.9 million for the prior year period. Rent expense is predominantly comprised of operating lease expenses for our brew pubs and office spaces and varies period-over-period based on lease amortization schedules and common area maintenance costs. The increase for the three months ended August 31, 2026 reflects incremental rent costs of $1.3 million associated with the Global BrewDog Acquisitions and the Lyphe Acquisition completed during the fourth fiscal quarter of fiscal year 2026.
Previous wording
For the three and nine months ended February 28, 2026, the Company incurred selling costs of $10.6 million or 5% of net revenue and $35.3 million or 6% of net revenue as compared to $13.9 million or 7% of net revenue and $41.8 million or 7% of net revenue in the prior year period respectively. These costs relate to third-party shipping costs for all segments, in addition to distributor commission incurred by the cannabis segment, Health Canada cannabis fees, and patient acquisition and maintenance costs. The decrease in selling costs for the three and nine months ended February 28, 2026 was primarily driven by lower freight costs in the beverage segment resulting from Project 420 cost‑saving initiatives, which improved freight as a percentage of sales by approximately 90 and 144 basis points for the three and nine month periods, respectively. In addition, lower freight costs in the Canadian cannabis segment following contract renegotiations improved freight as a percentage of sales by approximately 180 and 210 basis points for the three and nine month periods, respectively, and were further supported by lower commission rates in the Canadian cannabis sales channels.
Current wording
For the three months ended August 31, 2026, the Company incurred selling costs of $13.6 million or 5% of net revenue as compared to $12.9 million or 6% of net revenue in the prior year period. These costs relate to third-party shipping costs for all segments, in addition to distributor commission incurred by the cannabis segment, Health Canada cannabis fees, and patient acquisition and maintenance costs. The increase in selling costs for the three months ended August 31, 2026, was primarily attributable to $3.1 million of incremental selling costs associated with the Global BrewDog Acquisitions and the Lyphe Acquisition, as well as $1.7 million of incremental fuel and freight surcharges resulting from elevated global fuel prices and shipping disruptions associated with the ongoing conflict in the Middle East. These increases were partially offset by benefits realized from ongoing cost-saving initiatives and a change in revenue mix to lower selling cost segments.
Previous wording
The Company incurred non-production related amortization charges of $5.1 million and $13.4 million for the three and nine months ended February 28, 2026, compared to $23.2 million and $67.9 million in the prior year periods, respectively, based on depreciable capital and intangible assets useful lives. The decrease in the amortization expense is due to the lower carrying value of intangible assets as a result of the impairment charges recognized during the fiscal year ended May 31, 2025.
Current wording
The Company incurred non-production related amortization charges of $6.5 million for the three months ended August 31, 2026, compared to $3.9 million in the prior year period, based on depreciable capital and intangible assets useful lives. The increase is primarily attributable to incremental amortization expense of $2.4 million associated with the Global BrewDog Acquisitions and the Lyphe Acquisition completed during the fourth fiscal quarter of fiscal year 2026.
Previous wording
For the three and nine months ended February 28, 2026, the Company incurred marketing and promotion costs of $8.7 million and $28.8 million compared to $6.8 million and $28.1 million for the prior year periods, respectively and was driven by variability in discretionary marketing spend.
Current wording
For the three months ended August 31, 2026, the Company incurred marketing and promotion costs of $15.7 million, compared to $10.2 million for the prior year period. The increase was primarily driven by $5.6 million of incremental marketing and promotion costs associated with the Global BrewDog Acquisitions, as well as variability in discretionary marketing spend.
Previous wording
Research and development costs were $0.1 million and $0.2 million during the three and nine months ended February 28, 2026, compared to $0.1 million and $0.3 million in the prior year periods, respectively. These costs relate to external expenditures associated with the development of new products.
Current wording
Research and development costs were $0.1 million during the three months ended August 31, 2026, compared to $0.0 million in the prior year period. These costs relate to external expenditures associated with the development of new products.
Previous wording
A portion of the total consideration to be paid in connection with the Company’s acquisition of Montauk Brewing Company (“Montauk”) was contingent upon the achievement by Montauk of certain financial measures as of December 31, 2025. In the event that Montauk achieved either the pre-determined sales volume target or EBITDA target, then $15.0 million of contingent consideration would be deemed earned and payable. If both the sales volume target and the EBITDA target were achieved, an additional $3.0 million would be deemed earned and payable for a total contingent consideration payment of $18.0 million.
Current wording
A portion of the total consideration to be paid in connection with the Company’s acquisition of Montauk was contingent upon the achievement by Montauk of certain financial measures as of December 31, 2025. In the event that Montauk achieved either the pre-determined sales volume target or EBITDA target, then $15.0 million of contingent consideration would be deemed earned and payable. If both the sales volume target and the EBITDA target were achieved, an additional $3.0 million would be deemed earned and payable for a total contingent consideration payment of $18.0 million.
Previous wording
During the three months ended August 31, 2025, the Company reassessed the estimated fair value of the contingent consideration liability as $nil, based on subsequent information regarding Montauk’s operating results and revised expectations for the remainder of the earn‑out period. As a result of lower‑than‑anticipated sales volumes during the peak selling periods of June, July and August 2025, and the loss of certain national retail programs, management concluded that Montauk no longer had a viable path to achieving the sales volume target or the EBITDA target within the earn‑out period. Accordingly, the Company applied a probability of achievement of 0% to the sales volume target and 0% to the remaining criteria. The resulting $15.0 million change in fair value of the contingent consideration liability was recorded within the statement of profit and loss and contributed to the Company’s net income generated during the period ended August 31, 2025, despite historically reporting a net loss.
Current wording
During the three months ended August 31, 2025, the Company reassessed the estimated fair value of the contingent consideration liability as $nil, based on subsequent information regarding Montauk’s operating results and revised expectations for the remainder of the earn‑out period. As a result of lower‑than‑anticipated sales volumes during the peak selling periods of June, July and August 2025, and the loss of certain national retail programs, management concluded that Montauk no longer had a viable path to achieving the sales volume target or the EBITDA target within the earn‑out period. Accordingly, the Company applied a probability of achievement of 0% to the sales volume target and 0% to the remaining criteria. The resulting $15.0 million change in fair value of the contingent consideration liability was recorded within the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and contributed to the Company’s net income generated during the period ended August 31, 2025, despite historically reporting a net loss.
Previous wording
During the three months ended February 28, 2026, the earn-out period concluded and neither financial measure was achieved. Accordingly, no further changes to the fair value of the contingent consideration liability were recognized during the three months ended February 28, 2026 as no contingent consideration obligation was payable.
Current wording
During the remainder of fiscal 2026, the earn-out period concluded and neither financial measure was achieved. Accordingly, no further changes to the fair value of the contingent consideration liability were recognized during the year ended May 31, 2026 as no contingent consideration obligation was payable.
Previous wording
For the three and nine months ended February 28, 2026, the Company recorded $0.6 million and $2.5 million of litigation settlements costs and third-party fees incurred in defending these claims, net of favorable recoveries compared to $2.8 million and $5.3 million in the prior year period respectively. The decrease is related to period-to-period variability as litigation and settlement costs are non-recurring in nature.
Current wording
For the three months ended August 31, 2026, the Company recorded $0.8 million of litigation settlements costs and third-party fees incurred in defending these claims, net of favorable recoveries compared to $1.0 million in the prior year period. The decrease is related to period-to-period variability as litigation and settlement costs are non-recurring in nature. During the three months ended August 31, 2026, the Company settled a copyright infringement litigation claim for which insurance recovery is expected. Specifically, the Company expects to receive approximately $1.0 million in insurance proceeds to offset the same amount funded for settlement of this claim.
Previous wording
In connection with the integration of certain acquisitions and strategic transactions, the Company has incurred restructuring and exit costs in the amount of $4.1 million and $5.9 million for the three and nine months ended February 28, 2026, compared to $6.1 million and $17.2 million for the prior year period respectively. All restructuring plans are approved at the executive level, and their associated expenses are recognized in the period in which the plan is committed or otherwise incurred.
Current wording
In connection with the integration of certain acquisitions and strategic transactions, the Company has incurred restructuring and exit costs in the amount of $2.4 million for the three months ended August 31, 2026, compared to $0.9 million for the prior year period. All restructuring plans are approved at the executive level, and their associated expenses are recognized in the period in which the plan is committed or otherwise incurred.
Previous wording
Transaction (income) costs, net, include non-recurring acquisition related income and expenses, related legal, financial advisor and due diligence cost and expenses and transaction related compensation. For the three and nine months ended February 28, 2026, transaction (income) costs increased to $1.9 million and $2.9 million from $0.6 million and $2.6 million for the prior year periods, respectively. During the three and nine months ended February 28, 2026, transaction costs were primarily attributable to $1.2 million of legacy HEXO pre-acquisition tax settlements and $0.6 million of due diligence costs associated with ongoing transactions. In comparison, transaction costs during the prior year nine month period were primarily comprised of $1.1 million of costs related to the completion of Craft Acquisition II.
Current wording
Transaction costs, net, include acquisition related income and expenses, related legal, financial advisor and due diligence cost and expenses and transaction related compensation. For the three months ended August 31, 2026, transaction costs increased to $4.8 million from $0.4 million for the prior year period. During the three months ended August 31, 2026, transaction costs associated with the continued integration of BrewDog and Lyphe, as well as $1.1 million of professional and other fees related to the BrewDog administration process.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Gross profit and gross margin****for our reporting segments
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As the market continues to mature, we have seen increased demands and differentiation specifically with medical cannabis flowers. In response, we have launched ARX and Good Supply brands and related medical cannabis products, which provides the patient with a segmented portfolio of products while we continue to deliver on the trust, safety and consistency that has become expected from our Tilray Medical brand.