News

Class-action suit targets Canopy Growth

Published on April 18, 2025 by Pat Bulmer

Photo: Adobe Stock/the oz.

Two American law firms are calling for investors in Canopy Growth to contact them about a class-action lawsuit.

The Smiths Falls, Ont.-based company is accused of misleading investors about cost-reduction measures in a February financial statement.

People who acquired stock between May 30, 2024, and February. 6, 2025 can join the suit, said Robbins LLP of San Diego in a news release.

According to the complaint, Canopy failed to acknowledge significant costs in producing its new Claybourne pre-rolled joints. Those, along with costs incurred in connection with its Storz & Bickel vaporizers, “were likely to have a significant negative impact on the company’s gross margins and overall financial results,” the law firm said.

“Accordingly, defendants had overstated the efficacy of Canopy’s cost-reduction measures and the health of its gross margins.”

In the February financial statement and accompanying news release, Canopy claimed medical cannabis and vape sales had boosted its bottom line, though earnings and all other financial categories were still in the red.

Rosen Law Firm out of New York also put out a call for investors who lost more than $100,000 to contact it about a class action, citing the same issues.

“Some law firms issuing releases about this matter do not actually litigate securities class actions. Rosen Law Firm does,” the firm said in a news release.

Meanwhile Canopy continues to do business and just announced the launch of a new premium medical cannabis brand.

Spectrum Reserve is expected to introduce new strains on a regular basis, the company said in a news release. But some will come and go.

“The strains which generate the most positive and consistent customer feedback will remain in market, while others will be phased out to make way for new genetics,” the company said.