Canopy Growth Corporation Class Action Lawsuit - CGC
Case Summary
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The Canopy Growth class action lawsuit seeks to represent purchasers or acquirers of Canopy Growth Corporation (NASDAQ: CGC) securities between May 30, 2024 and February 6, 2025, inclusive (the “Class Period”). Captioned Baron v. Canopy Growth Corporation, No. 25-cv-01877 (E.D.N.Y.), the Canopy Growth class action lawsuit charges Canopy Growth and certain of Canopy Growth’s top current and former executives with violations of the Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Canopy Growth class action lawsuit, please provide your information in the form on this page. You can also contact attorney J.C. Sanchez or Jennifer N. Caringal of Robbins Geller by calling 800/449-4900 or via e-mail at info@rgrdlaw.com. Lead plaintiff motions for the Canopy Growth class action lawsuit must be filed with the court no later than June 3, 2025.
CASE ALLEGATIONS: Canopy Growth, together with its subsidiaries, produces, distributes, and sells cannabis and hemp-based products for recreational and medical purposes. Canopy Growth’s products include pre-rolled joints in Canada through an exclusive licensing agreement with Claybourne Co. and its Storz & Bickel brand vaporizer devices.
The Canopy Growth class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Canopy Growth had incurred significant costs producing Claybourne pre-rolled joints in connection with the Claybourne product launch in Canada; (ii) the foregoing costs, in addition to certain indirect costs that Canopy Growth incurred in connection with its Storz & Bickel vaporizer devices, were likely to have a significant negative impact on Canopy Growth’s gross margins and overall financial results; and (iii) accordingly, defendants had overstated the efficacy of Canopy Growth’s cost reduction measures and the health of its gross margins while downplaying issues with the same.
The Canopy Growth class action lawsuit further alleges that on February 7, 2025 Canopy Growth announced its financial results for the third quarter (“Q3”) of its FY 2025, reporting that its “[g]ross margin decreased by 400 basis points (‘bps’) to 32% in [Q3 2025] compared to [the same quarter the year prior] primarily due to the incremental costs related to the Claybourne infused pre-roll launch in Canada, and an increase in indirect costs of Storz & Bickel vaporizer devices.” These factors, according to the complaint, contributed to Canopy Growth reporting a wider-than-anticipated Q3 2025 loss of C$1.11 per share compared to the C$0.48 per share loss estimated by analysts. Canopy Growth’s CFO, defendant Judy Hong, revealed later that day that Canopy Growth’s Claybourne product launch costs were “primarily attributable to [the] higher initial cost to produce Claybourne” products and that the “indirect costs” related to Storz & Bickel vaporizer devices were attributable to, among other things, shipping costs, according to the Canopy Growth class action lawsuit. On this news, the price of Canopy Growth common shares fell by more than 27%.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired Canopy Growth securities during the Class Period to seek appointment as lead plaintiff in the Canopy Growth class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Canopy Growth class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Canopy Growth class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Canopy Growth class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities fraud and shareholder litigation. Our Firm has been ranked #1 in the ISS Securities Class Action Services rankings for four out of the last five years for securing the most monetary relief for investors. In 2024, we recovered over $2.5 billion for investors in securities-related class action cases – more than the next five law firms combined, according to ISS. With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world, and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest ever – $7.2 billion – in In re Enron Corp. Sec. Litig.