Tilray Founders Lose Round One Over Cannabis Company Restructure

Tilray Inc.'s founders must face shareholder claims over their alleged scheme to extract tax benefits at the expense of public investors by overhauling the Canadian cannabis company’s ownership structure to cement their control over it, a Delaware judge ruled.

Chancellor Kathaleen McCormick let the derivative lawsuit move forward in Delaware Chancery Court, citing “plausible” claims that Tilray was controlled by its three co-founders, that its restructuring was an act of self-dealing, and that the board was too conflicted to be trusted with an internal investigation.

It’s “reasonably conceivable” that “the desire to avoid massive tax liabilities through the reorganization” was ...