After the market closed on Friday, Tilray, Inc. (TLRY) filed two important documents with the US Securities Exchange Commission (SEC) as it relates to the previously announced merger agreement with Aphria Inc. (APHA.TO) (APHA).

When the agreement was announced, the market responded favorably and both Aphria and Tilray bounced higher. We have been closely following the trend since the announcement and will be monitoring how the market responds to the filings from Friday.

After reading Tilray’s filings, we discovered that three separate shareholder lawsuits have been filed. The complaints generally allege that Tilray and the members of its Board of Directors did not include pieces of material information in the proxy statement.

One of the complaints states that the members of the Board of Directors breached their fiduciary duties when it left key information out of the proxy statement. The complaints seek to receive additional disclosures that are related to the merger agreement.

In the filing, Tilray stated that the plaintiffs’ allegations lack merit and that it will not disclose additional filings or subsequent amendments. We are not surprised to see lawsuits filed against the company and will monitor how the complaints impact the timing of the merger agreement.

We believe the combination of Aphria and Tilray would compete against Canopy Growth Corporation (WEED.TO) (CGC). The combined company would have a massive international presence (especially in the European Union) as well as more market share of Canada’s medical and recreational cannabis market.

Going forward, we do not expect the lawsuits to impact the merger agreement and will monitor how the situation progresses. Tilray and Aphria are led by management teams that have a proven track record of success in several highly regulated industries and we believe the management teams are able to handle the current situation.