NEW YORK, Sept. 03, 2019 (GLOBE NEWSWIRE) — Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in CannTrust Holdings Inc. (“CannTrust” or the “Company”) (NYSE:CTST) of the September 9, 2019 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in CannTrust stock or options between November 14, 2018 and July 5, 2019 and would like to discuss your legal rights, click here: www.faruqilaw.com/CTST. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased CannTrust common stock between November 14, 2018 and July 5, 2019 (the “Class Period”). The case, Alvarado v. CannTrust Holdings Inc. et al., No. 19-cv-06438 was filed on July 11, 2019.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: 1) while the Company represented that its facilities were licensed, between October 2018 and March 2019 the Company had grown cannabis in five unlicensed rooms in violation of Canadian law causing the Company’s Niagara Perpetual Harvest Facility in Pelham, Ontario to be non-compliant with certain Canadian regulations; 2) that 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; 3) that Company employees provided materially inaccurate information to Canadian regulators; and 4) that due to these undisclosed material negative conditions, the Company’s was facing undisclosed, material risks, including inventory holds of a material amount of the Company’s product, product shortages as a result of inventory holds, increased regulatory scrutiny, material delays to further licensing, and the material loss of customers.
On July 8, 2019, CannTrust announced that its greenhouse facility in Pelham, Ontario, was audited by Health Canada and found to be “non-compliant.” Health Canada has placed a hold on approximately 5,200 kilograms of dried cannabis that was harvested in unlicensed rooms at the Pelham facility, until it deems CannTrust is compliant with regulations. CannTrust also said that it instituted a voluntary hold on approximately 7,500 kilograms of dried cannabis equivalent that also was produced in the unlicensed rooms.
On this news, the Company’s stock price fell from $4.94 per share on July 5, 2019 to $3.83 per share on July 8, 2019—a $1.11 or 22.47% drop.
Similarly, on July 9, 2019, MarketWatch reported that BMO Capital Markets downgraded CannTrust stock, the Financial Post reported that the Company’s Chief Executive Officer, Defendant Peter Aceto (“Aceto”) confirmed that some of the cannabis grown by Canntrust Holdings in unlicensed rooms at its Niagara facility has already been shipped to provinces across Canada, and MarketWatch reported that StenoCare, the Company’s Denmark-based joint venture partner, said it had received a number of batches of cannabis from CannTrust and after investigating, found that one was from part of the unlicensed CannTrust grow.
On this news, the Company’s stock price fell from $3.83 per share on July 8, 2019 to $3.60 per share on July 9, 2019—a $0.23 or 6.01% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding CannTrust’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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