Aurora Cannabis could end up paying more than $8 million (US) to put to rest allegations that it inflated its stock price in order to mislead investors. 

On October 10, 2024, a US federal court judge gave preliminary approval to an $8.05 million cash settlement between Aurora Cannabis Inc. and investors who say Aurora misled them with a $21.7 million round-trip, “sham transaction” between Aurora and another Canadian cannabis company called Radient Technologies Inc.

Radient Technologies Inc. was a Canadian extract maker with ties to Aurora, alleges the lawsuit. Radiant revoked its cannabis licence in 2023. In 2017, Aurora made a CAD$6.2 million investment in Radiant.

A final approval hearing has been set for January 28, 2025. The settlement would apply to investors who purchased Aurora’s common stock on the New York Stock Exchange between October 23, 2018, and February 28, 2020.

For their part, Aurora has denied these allegations. The plaintiffs alleged that Aurora came up with this transaction in order to achieve a desired projection of positive adjusted EBITDA for the fourth fiscal quarter of 2019, ending June 30, 2019. 

In their defence, Aurora argued that plaintiffs could not prove loss causation related to the October 9 and October 17, 2019 dates, noting that Aurora’s stock “traded downward in lockstep with other cannabis stocks,” according to court records. 

The suit began in 2019 and has gone through several rounds of complaints since that time.

h/t to law360.com