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Kessler Topaz Meltzer & Check, LLP, a Philadelphia-based law firm, announced Tuesday (July 16) that a securities fraud class action lawsuit has been filed in the United States District Court for the Southern District of New York against CannTrust Holdings (NYSE:CTST,TSX:TRST). The lawsuit is being filed on behalf of those who purchased CannTrust securities between November 14, 2018 and July 5, 2019 amidst questions surrounding CannTrust’s illegal growing operations.
As quoted in the press release:
According to the complaint, CannTrust is a licensed producer and distributor of medical and recreational cannabis.
The Class Period commences on November 14, 2018, when CannTrust announced its third quarter 2018 financial results in a press release.
According to the complaint, on July 8, 2019, CannTrust disclosed that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations, and that CannTrust was growing cannabis in unlicensed rooms between October 2018 and March 2019.
The complaint alleges that, throughout the Class Period, the defendants failed to disclose to investors that: (1) CannTrust was growing cannabis in its Pelham greenhouse while applications for regulatory approval were still pending; (2) CannTrust’s Pelham greenhouse did not comply with certain regulations; (3) as a result, CannTrust was reasonably likely to face an inventory hold by Health Canada until the Pelham facility becomes compliant with applicable regulations; (4) as a result, CannTrust’s customers would face shortages and would likely seek product from CannTrust’s competitors; and (5) as a result of the foregoing, the defendants’ positive statements about CannTrust’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.
Click here to read the full press release.
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