NEW YORK, July 11, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit in the United States District Court for the Southern District of New York against CannTrust Holdings Inc. ("CannTrust" or the "Company") (NYSE: CTST; OTC: CNTTF), Peter Aceto, the Company's CEO, Greg Guyatt, the Company's CFO, and Ian Abramowitz, the Company's former CFO (collectively, the "Defendants").
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission, and is brought by Plaintiff on behalf of a class of all persons and entities who purchased the publicly traded common stock of CannTrust on the New York Stock Exchange ("NYSE") or any U.S.-based trading platform between November 14, 2018 and July 5, 2019, inclusive (the "Class Period").
The complaint further alleges that CannTrust is a Canada-based producer of medical and recreational cannabis and that, during the Class Period, the Company represented that it was a licensed producer of medical and recreational cannabis in Canada and that it maintained all necessary licensing.
The complaint further alleges that "[w]hile the Company represented that its facilities were licensed, unknown to investors, from October 2018 through and March 2019, the Company was growing cannabis in five unlicensed rooms causing the Company's Niagara Perpetual Harvest Facility to be non-compliant with certain Canadian regulations, and the Company had shipped unlicensed cannabis from the Company's Niagara Perpetual Harvest Facility to at least StenoCare in Denmark in violation of the Canadian Cannabis Act."
The Complaint further alleges that on July 8, 2019, before the market opened, CannTrust shocked investors when it disclosed that it received a compliance report from Health Canada notifying the Company that the Niagara Perpetual Harvest Facility greenhouse facility in Pelham, Ontario is non-compliant with certain regulations. The Company's press release stated, in part, that the Company "has received a compliance report from Health Canada notifying the Company that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations. CannTrust has accepted Health Canada's non-compliance finding and has taken actions to ensure current and future compliance."
"The non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees. Growing in unlicensed rooms took place from October 2018 to March 2019 during which time CannTrust had pending applications for these rooms with Health Canada . . . Health Canada has placed a hold on inventory which includes approximately 5,200kg of dried cannabis that was harvested in the previously unlicensed rooms in Pelham, until it deems that the Company is compliant with regulations. In addition, CannTrust has instituted a voluntary hold of approximately 7,500kg of dried cannabis equivalent at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms."
On July 8, 2019, following this disclosure, the price of CannTrust's common stock declined on the NYSE by $1.11 per share or over 22%, from a closing price of $4.94 per share on July 5, 2019, to close at $3.83 per share on July 8, 2019 on heavy trading volume.
If you are a member of the proposed Class, you may move the court no later than September 9, 2019 to serve as a lead plaintiff for the proposed Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.
Plaintiffs seek to recover damages on behalf of the proposed Class and are represented by Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com). Our firm, with offices in New York, San Francisco, Los Angeles, Chicago, and New Jersey, has decades of experience in prosecuting investor class actions and actions involving violations of the U.S. federal securities laws.
If you have any questions about this Notice, the action, your rights, or your interests, or would like a copy of the complaint, please e-mail attorney Jeffrey Campisi (email@example.com), or contact him by phone, regular mail, or fax:
Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, NY 10022
Toll-Free Telephone: (800) 290-1952
Telephone: (212) 687-1980
Fax: (212) 687-7714
E-mail address: firstname.lastname@example.org
SOURCE Kaplan Fox & Kilsheimer LLP