Item 1A. Risk Factors.
Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended May 31, 20234 includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. A summary of our risk factors is included below. Except for the below risk factors, there have been no material changes from the risk factors described in our Form 10-K.
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| We may not achieve the expected revenue or other benefits from the craft beer operations acquired |
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| We may |
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| Additional impairments of our goodwill, impairments of our intangible and other long-lived assets, and changes in the estimated useful lives of intangible assets could have a material adverse impact on our financial results. |
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| Our business is dependent upon regulatory approvals and licenses, ongoing compliance and reporting obligations, and timely renewals. |
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| Government regulation is evolving, and unfavorable changes or lack of commercial legalization could impact our ability to carry on our business as currently conducted and the potential expansion of our business. |
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| Our production and processing facilities are integral to our business and adverse changes or developments affecting our facilities may have an adverse impact on our business. |
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| We face intense competition, and anticipate competition will increase, which could hurt our business. |
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| Regulations constrain our ability to market and distribute our products in Canada. |
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| United States regulations relating to hemp-derived |
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| Changes in consumer preferences or public attitudes about alcohol could decrease demand for our beverage alcohol products. |
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| SweetWater Brewing, Breckenridge |
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| We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future. |
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| We are subject to litigation, arbitration and demands, which could result in significant liability and costs, and impact our resources and reputation. |
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| Our strategic alliances and other third-party business relationships may not achieve the intended beneficial impact and expose us to risks. |
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| We may not be able to successfully identify and execute future acquisitions, dispositions or other equity transactions or to successfully manage the impacts of such transactions on our operations. |
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| We are subject to risks inherent in an agricultural business, including the risk of crop failure. |
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| We depend on significant customers for a substantial portion of our revenue. If we fail to retain or expand our customer relationships or significant customers reduce their purchases, our revenue could decline significantly. |
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| Our products may be subject to recalls for a variety of reasons, which could require us to expend significant management and capital resources. |
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| Significant interruptions in our access to certain supply chains for key inputs such as raw materials, supplies, electricity, water and other utilities may impair our operations. |
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| Management may not be able to successfully establish and maintain effective internal controls over financial reporting. |
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| The price of our |
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| The volatility of our stock and the stockholder base may hinder or prevent us from engaging in beneficial corporate initiatives. |
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| The terms of our outstanding warrants may limit our ability to raise additional equity capital or pursue acquisitions, which may impact funding of our ongoing operations and cause significant dilution to existing stockholders. |
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| We may not have the ability to raise the funds necessary to settle conversions of the convertible securities in cash or to repurchase the convertible securities upon a fundamental change. |
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| We are subject to other risks generally applicable to our industry and the conduct of our business. |
We may experience difficulties achieving the expected benefits, including revenue and sales growth, of acquiring certain craft beer operations from Anheuser-Busch (the ABI Acquisitions).
The success of the ABI Acquisitions will depend in part on our ability to achieve the expected business opportunities, revenue and sales growth prospects from the ABI Acquisitions in an efficient and effective manner. We may also not be able to fully realize the operational efficiencies and associated cost synergies or leverage the potential business opportunities and growth prospects to the extent anticipated or at all.
The ABI Acquisitions were completed on September 29, 2023. Efforts to achieve expected benefits of the ABI Acquisitions may require substantial resources and divert management attention. Challenges associated with achieving such benefits may include those related to sales and marketing efforts across our expanded product portfolio, operational efficiency and production optimization, and effectively integrating the ABI Acquisitions into Tilray. If we are unable to successfully integrate certain aspects of the operations of the ABI Acquisitions or experience delays, we may incur unanticipated liabilities and be unable to fully realize the potential benefit of the revenue growth, synergies and other anticipated benefits resulting from the arrangement, and our business, results of operations and financial condition could be adversely affected. Some of these factors are outside our control, and any of them could delay or increase the cost of our efforts.
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