Marijuana MSO Canopy Growth hit with class-action lawsuit

Investors in marijuana multistate operator Canopy Growth Corp. sued the company last month to recover alleged damages following a poor quarterly earnings report.

The class-action lawsuit, filed by shareholders who purchased Canopy between May 30, 2024 and February 6, 2025, followed a sharp decline in the value of company stock following a Feb. 7 earnings call.

At the heart of the investor dispute are allegations that Canopy downplayed the costs of launching a new pre-roll line and of acquiring a major vaporizer company.

According to court records, the complaint alleges that Canopy made false and misleading statements about its business, operations and prospects by failing to disclose :

The current lead plaintiff in the proposed class-action suit is Bruce D. Baron.

The suit names former company CEO David Klein, who retired in March, and CFO Judy Hong as defendants.

The company has until June to respond to the suit in full, according to court documents filed late last month.

On Feb. 7, before the market opened, Canopy issued a press release announcing its financial results for the third quarter.

It reported that its “[g]ross margin decreased by 400 basis points to 32%” in the third quarter of 2025 compared to the same period a year ago because of costs related to the Claybourne launch in Canada and an increase in the costs of the Storz & Bickel vaporizers.

During a conference call later that day, Canopy Chief Financial Officer Judy Hong said the company’s Claybourne product launch costs were “primarily attributable to [the] higher initial cost to product Claybourne” products.

Hong also attributed the “indirect costs” related to Storz & Bickel devices to shipping.

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As a result, Canopy’s common share price fell $0.76 per share, or 27.34%, to close at $2.02 on Feb. 7.

Canopy shares trade on the Nasdaq under the symbol CGC.

Shares were trading around $1.32 around midday Friday.