Investors file class action against CannTrust
By Grow Opportunity staff
By Grow Opportunity staff
A group of investors are filing a class action lawsuit against CannTrust Holdings Inc. for damages and losses.
The action, which was confirmed by a consortium of Ontario law firms in a Feb. 3 statement, alleges that CannTrust had failed to disclose material information regarding the non-compliance of its cannabis-growing facilities with applicable laws and regulations.
Health Canada suspended CannTrust’s licence to produce and sell cannabis on September 2019 after an investigation found illegal growing operations at the company’s Pelham, Ont. facility. In July, 2019, interim chief executive Robert Marcovitch said the board was kept in the dark about unlicensed growing at its Ontario greenhouse and only learned of the allegations after Health Canada notified the pot company of its discovery. Shares took an almost 22 per cent dive within the month from $3.43 to $2.68. CannTrust stock today is at $1.37 in the Toronto Stock Exchange (TSX).
The class action alleges that when the falsity of the information was revealed, the price of CannTrust securities dropped significantly, causing damages and loss to the Class Members. The action seeks relief for alleged misrepresentation (under the common law and pursuant to Ontario Securities Act), negligence, oppression and conspiracy.
The class action has been filed to the Ontario Superior Court of Justice on behalf of all investors who acquired CannTrust securities on TSX from Oct. 1, 2018 to Sept. 17, 2019, as well as all investors who acquired CannTrust securities during the company’s May 2019 prospectus offering.
“We look forward to bringing this case before the courts at the earliest opportunity so that the rights of the class members can be addressed in a fair and timely way,” said Marie Henein, one of the lawyers representing the class.
“Cases like this show the power of class actions to bring access to justice to individuals who place their savings at risk in the stock markets” said Dimitri Lascaris, who is also part of the team representing for the class of investors.
Members of the proposed class are encouraged to consult that website for updates regarding the progress of the litigation, at canntrustclassaction.ca.
The consortium to which the Court has awarded carriage is comprised of the law firms Henein Hutchison LLP, Kalloghlian Professional Corporation, A. Dimitri Lascaris Law Professional Corporation and Strosberg Sasso Sutts, LLP.