This was a securities fraud class action filed on behalf of all purchasers of Canopy Growth Corporation (“Canopy” or the “Company”) securities between June 27, 2018 and May 28, 2020, 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 arose from Defendants’ alleged misrepresentations and concealment of material facts about Canopy's financial results, business, operations, and prospects. Specifically, during the Class Period, the lawsuit stated that 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. Hagens Berman achieved a settlement with categories of relief valued up to $13 million on behalf of investors in 2022, resolving these claims, and payments to class members are forthcoming in 2023.
CASE TIMELINE
Hagens Berman is pleased to announce a settlement with Defendants totaling $13 million. The settlement provides significant relief to purchasers of Canopy Growth Corporation securities from June 27, 2018 through May 28, 2020, both dates inclusive, resolving allegations that Defendants misled investors by misrepresenting and failing to disclose the true demand and potential market for its cannabis products.
The Court approved the settlement on June 7, 2022. The deadline for class members to submit a claim is June 14, 2022. For more details on the settlement, visit StrategicClaims.net/Canopy.
U.S. District Court Judge Kevin McNulty approved a $13 million settlement.
