Class Action Shareholder Lawsuit Against Cronos Group Rejected By Ontario Court

In #Canada, #Cronos Group avoids a class action lawsuit from #shareholders over alleged #financial disclosure misrepresentations. #Ontario’s Superior Court of Justice denied a motion from a #retail #investor against the #cannabis company and several of its executives, which claimed numerous accounting issues caused #stock market losses. The plaintiff, Harpreet Badesha, argued there were more than 570 inaccuracies in the #business’s 2019 quarterly reports, which were ultimately corrected in #March of last year. Citing research from investment firm #Morningstar, the court rejected the suit on the basis that Cronos’s share #price decline was more likely affected by #pandemic-prompted industry #disruption rather than any purported financial misstatements. The court’s decision could influence at least 3 other attempted class action suits against the company in #NewYork, though it’s not clear if those efforts are ongoing. The failed legal action reflects an uptick in securities lawsuits against #marijuana companies, as the #Stanford Law School reported 28 within the past 7 years, with the majority filed in the last two years alone. Other embattled Canadian cannabis producers include Canopy Growth, Hexo, and #Tilray. As industry consolidation continues, legal analysts predict a surge of #shareholder litigation in #2022.

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William Bradley

William Bradley

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