Canopy Growth Corporation
Company Name | Canopy Growth Corporation |
Stock Symbol | CGC |
Class Period | May 30, 2024 to February 06, 2025 |
Lead Plaintiff Motion Deadline | June 03, 2025 |
On February 7, 2025, Canopy released its third quarter fiscal year 2025 financial results, missing consensus estimates and reporting that its gross margin had decreased by 400 basis points to 32% “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[.]”
On this news, Canopy’s stock price fell $0.76, or 27.3%, to close at $2.02 per share on February 7, 2025, thereby injuring investors.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Canopy had incurred significant costs producing Claybourne pre-rolled joints in connection with the Claybourne product launch in Canada; (2) the foregoing costs, in addition to certain indirect costs that Canopy incurred in connection with its Storz & Bickel vaporizer devices, were likely to have a significant negative impact on the Company’s gross margins and overall financial results; (3) 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 (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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