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Cannabis companies facing litigation suits stateside

Big players in the cannabis industry are facing class action lawsuits stateside. Recreational cannabis use is legal in Alberta, along with the rest of the country, but the industry hasn't been without its issues, including a number of litigation cases. Problems range from allegedly misleading investors to failure to disclose issues in business due to major losses in the stock market.

Most of the cases  now in American courts involve Canopy Growth, Aurora Cannabis and Hexo Corp. The lawsuits claim when issues in those companies became known, their stock plummeted. Experts say the suits are creating added uncertainty, making it difficult for these corporations to secure additional investors.

One of the cases claims Hexo failed to tell its investors it was allegedly channel-stuffing or padding revenue figures. The practice involves putting more product on the market than retailers can sell. The lawsuit also alleges the company was growing cannabis in a facility without proper licensing by Health Canada. Aurora Cannabis, based out of Alberta, is facing allegations of oversupplying the market and is also accused of not getting the proper approvals to use a particular growing method which originated in Germany.

These types of litigation suits can have an adverse affect on a company's reputation, growth and profit margins. An experienced Alberta lawyer may be able to help a client deal with such major issues as negligence allegations, compliance matters, and investor relationships. A lawyer will have an understanding of the complexities involved in these types of disputes and may be able to offer a client invaluable legal advice in litigation cases.

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Calgary, AB T2E 2V9

Phone: 403-879-1613
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