A law firm has announced that a class action lawsuit has been filed against Canopy Growth Corporation on behalf of those who purchased the company’s securities between May 30, 2024 and February 6, 2025.

Pomerantz LLP announced that a class action lawsuit has been filed against Canopy Growth Corporation and certain officers.  The class action, filed in the United States District Court for the Eastern District of New York, is on behalf of a class “consisting of all persons and entities other than Defendants that purchased or otherwise acquired Canopy securities between May 30, 2024 and February 6, 2025.” 

The lawsuit seeks to recover what it says are damages caused by Canopy’s violations of the federal securities laws.

The suit alleges that Canopy made materially false and misleading statements regarding the costs of producing Claybourne pre-rolled for launch into the Canadian market and costs associated with its Storz & Bickel vaporizer devices. 

Canopy, the suit contends, made misleading overstatements about the efficacy of its cost reduction measures and the health of its gross margins while downplaying related issues.

From a press release issued by Pomerantz LLP:

“On February 7, 2025, during pre-market hours, Canopy issued a press release announcing its financial results for the third quarter (Q3) of its FY 2025.  Among other items, Canopy reported that its “[g]ross margin decreased by 400 basis points 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 contributed to Canopy 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.

“The same day, Canopy held a conference call with investors and analysts to discuss its Q3 2025 financial results. During the call, Canopy’s Chief Financial Officer, Defendant Judy Hong (“Hong”), revealed that the Company’s Claybourne product launch costs were “primarily attributable to [the] higher initial cost to produce Claybourne” products.  Defendant Hong also disclosed that the “indirect costs” related to Storz & Bickel vaporizer devices were attributable to, inter alia, shipping costs.

“On this news, Canopy’s common share price fell $0.76 per share, or 27.34%, to close at $2.02 per share on February 7, 2025.”

Canopy has not yet issued a statement regarding this announcement. 

Investors who purchased or otherwise acquired Canopy securities during the class period have until June 3, 2025 to ask the Court to appoint them as Lead Plaintiff for the class.

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