The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Canopy Growth Corporation (“Canopy Growth” or “the Company”) (NASDAQ: CGC) violations of the securities laws.
The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. Canopy Growth announced on May 10, 2023, via Form 8-K: “management of the Company identified certain trends in the booking of sales by the BioSteel Sports Nutrition Inc. (“BioSteel”) business unit for further review. The Company, together with independent external counsel and forensic accountants, and under the oversight of the Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”) of the Company, initiated an internal review of the financial reporting matters related to BioSteel (the “BioSteel Review”). Although the BioSteel Review remains ongoing, the Company has preliminarily identified material misstatements in the Prior Financial Statements (as defined below) related to sales in the BioSteel business unit that were accounted for incorrectly. In particular, on May 4, 2023, the Company, in consultation with the Audit Committee, concluded that the Company’s (i) audited consolidated financial statements for the fiscal year ended March 31, 2022, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “2022 10-K”), and (ii) unaudited consolidated financial statements for the quarterly periods ended June 30, 2022, September 30, 2022 and December 31, 2022, included in the Company’s Quarterly Reports on Form 10-Q for such quarterly periods (collectively, the “Form 10-Qs” and together with the 2022 10-K, the “Prior Financial Statements”), should no longer be relied upon because of certain material misstatements contained in the Prior Financial Statements. In addition, the reports of the Company’s independent registered public accounting firm included in the 2022 10-K should no longer be relied upon.” Based on this news, shares of Canopy Growth fell 14.75% on the next day.
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