NEW YORK, NY / ACCESSWIRE / December 26, 2019 / Pomerantz LLP announce that a class action lawsuit has been filed against Canopy Growth Corporation ("Canopy" or the "Company") (NYSE:CGC) and certain of its officers. The class action, filed in United States District Court, for the Southern District of New York, and docketed under 19-cv-11341, is on behalf of a class consisting of investors who purchased or otherwise acquired Canopy securities between September 8, 2017 and November 13, 2019, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Canopy securities during the class period, you have until January 20, 2020 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
[Click here for information about joining the class action]
Canopy operates through two segments-Cannabis Operations and Canopy Rivers. The Company's products include dried flowers, oils and concentrates, softgel capsules, and hemps. It offers its products under the Tweed, Spectrum, DNA Genetics, CraftGrow, Tokyo Smoke, DOJA, Van der Pop, and Maitri brands. The Company also provides growth capital and a strategic support platform that pursues investment opportunities in the global cannabis sector.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Canopy had exaggerated and/or overestimated the potential market for its products in Canadian retail stores; (ii) as a result, Canopy had failed to properly account for inventory and demand for its products, leading to inventory write-offs and restructuring charges; (iii) all of the foregoing was reasonably likely to have a material negative impact on the Company's financial results; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
On November 14, 2019, Canopy announced its financial results for the second quarter of fiscal year 2020, which ended on September 30, 2019 (the "2Q20 Press Release"). Among other results, the 2Q20 Press Release reported revenue that fell below the lowest analyst estimate and an EBITDA loss of C$155.7 million, which one analyst described as "astounding." The 2Q20 Press Release further advised investors that it was unlikely to meet its previous revenue guidance of C$250 million by the fiscal fourth quarter. As explained by Canopy's Chief Executive Officer ("CEO"), Mark Zekulin ("Zekulin"), "provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market." The 2Q20 Press Release further advised that, "[a]s part of a management-initiated portfolio review, the Company has taken a restructuring charge of $32.7 million for returns, return provisions, and pricing allowances primarily related to its softgel & oil portfolio"; "recorded an inventory charge of $15.9 million to align the portfolio with the new strategy"; and that "[t]he Q2 2020 gross margin impact of the portfolio restructuring costs is $40.4 million."
On this news, Canopy's stock price fell $2.66 per share, or 14.38%, to close at $15.84 per share on November 14, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
SOURCE: Pomerantz LLP
ReleaseID: 571420
