A class action lawsuit was filed Tuesday against Canopy Growth Corporation alleging the company “made materially false and misleading statements regarding Canopy’s business, operations, and prospects” related to its Claybourne pre-rolls and Storz & Bickel vaporizer brand.
In a press release, Pomerantz LLP, which filed the lawsuit, contends Canopy’s financial statements around the Claybourne product launch, and that the company failed to disclose it had “incurred significant costs producing Claybourne pre-rolled joints in connection with the Claybourne product launch in Canada” and that indirect costs associated with the Storz & Bickel devices “were likely to have a significant negative impact on the Company’s gross margins and overall financial results.”
“…Accordingly, Defendants had overstated the efficacy of Canopy’s cost reduction measures and the health of its gross margins while downplaying issues with the same; and as a result, Defendants’ public statements were materially false and misleading at all relevant times.” — Pomerantz LLP, in a press release
The law firm points to a February 7 press release from Canopy announcing its financial results for the third quarter of its fiscal year 2025 wherein it reported that its “gross margin decreased by