Cannabis market leader Canopy Growth Corp. said Thursday it is aware of yet-to-be certified securities class-action suits that have been filed in the U.S. alleging the Canadian company made false and misleading statements, and intends to vigorously defend itself. "The company believes it has conducted itself in accordance with all relevant securities laws, and that the claims are without merit," Canopy said in a statement. It did not offer further details. Law firm Pomerantz LLP said Wednesday it was investigating claims on behalf of Canopy investors relating to concerns about the company and certain of its officers and/or directors regarding possible securities fraud and other unlawful business practices. Canopy's second-quarter earnings released Nov. 14 reported revenue that was below analyst estimates and an EBITDA loss of C$155.7 million ($116.9 million). One analyst described the numbers as "astounding," said Pomerantz. The company further warned that it was unlikely to meet revenue guidance for the fourth quarter, pushing its stock sharply lower. The cannabis sector has been slammed for several months as the Canadian legal market is developing far more slowly than expected and companies are still struggling to sell cannabis and make money. Canopy shares have fallen 34% in 2019, while the ETFMG Alternative Harvest ETF has fallen 31% and the S&P 500 has gained 24%. Read More...
Cannabis market leader Canopy Growth Corp. said Thursday it is aware of yet-to-be certified securities class-action suits that have been filed in the U.S. alleging the Canadian company made false and misleading statements, and intends to vigorously defend itself. “The company believes it has conducted itself in accordance with all relevant securities laws, and that the claims are without merit,” Canopy said in a statement. It did not offer further details. Law firm Pomerantz LLP said Wednesday it was investigating claims on behalf of Canopy investors relating to concerns about the company and certain of its officers and/or directors regarding possible securities fraud and other unlawful business practices. Canopy’s second-quarter earnings released Nov. 14 reported revenue that was below analyst estimates and an EBITDA loss of C$155.7 million ($116.9 million). One analyst described the numbers as “astounding,” said Pomerantz. The company further warned that it was unlikely to meet revenue guidance for the fourth quarter, pushing its stock sharply lower. The cannabis sector has been slammed for several months as the Canadian legal market is developing far more slowly than expected and companies are still struggling to sell cannabis and make money. Canopy shares have fallen 34% in 2019, while the ETFMG Alternative Harvest ETF has fallen 31% and the S&P 500 has gained 24%.
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