Canopy Growth Corporation (NYSE: CGC)
Co-Lead Counsel Appointed
Hagens Berman has been appointed co-lead counsel in the securities class-action lawsuit agains Canopy Growth Corporation.
This is a securities fraud class action filed on behalf of all purchasers of Canopy Growth Corporation (“Canopy” or the “Company”) securities between Sept. 8, 2017 and Nov. 13, 2019, inclusive (the “Class Period”), alleging claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Canopy, an Ontario, Canada-based cannabis company, and certain of its most senior officers.
The case arises from Defendants’ misrepresentations and concealment of material facts about the about Canopy's financial results, business, operations, and prospects. Specifically, during the Class Period, Canopy promoted the strong demand and potential market for its cannabis products, including its softgel and oil products. In truth, the Company was experiencing weak demand for its softgel and oil products and Defendants were materially exaggerating and overestimating the potential market for its products. In addition, Defendants failed to disclose that the Company’s stated growth plans were incongruous with the revenue and demand it was realizing and would reasonably produce. Further, Defendants materially overstated the value of the Company’s aging biological assets. As a result of this information being withheld from the market, the Company’s securities traded at artificially inflated prices throughout the Class Period.
The truth emerged through a series of disclosures, beginning on July 3, 2019 and ending on Nov. 14, 2019, when the Company announced disappointing financial results for the Second Quarter of fiscal year 2020. In particular, the Company disclosed that it would be taking a CA$32.7 million restructuring charge due to poor sales, excessive returns, and excess inventory.
In response to each of these disclosures, Canopy’s stock price declined sharply, thereby damaging investors.
On Feb. 10, 2020, the court appointed a group of five Canopy investors Lead Plaintiff and approved their selection of Hagens Berman to serve as Co-Lead Counsel for the Class together with two other firms.
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