Cronos Group Inc. (Nasdaq: CRON)
A class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased shares of Cronos Group Inc. (Nasdaq: CRON), between August 21, 2018 to August 30, 2018 (the "Class Period").
The complaint charges Cronos and its Chief Executive Officer with violations of the Securities Exchange Act of 1934. Cronos engages in the production and sale of cannabis in federally legal jurisdictions, including Canada and Germany.
On August 21, 2018, Cronos announced that it had secured “listings and signed binding master supply agreements with both the Ontario Cannabis Retail Corporation and the BC Liquor Distribution Branch.” According to the announcement, in combination, “these provinces encompass over 50% of the Canadian population and hence the potential customer base which the Company is prepared to serve.”
The complaint alleges that defendants’ statements were materially false and misleading because they failed to disclose material adverse facts about the Company’s business and prospects, including the size of the distribution agreements with the provinces announced on August 21, 2018, which were relatively small and could not justify the premium investors were paying for the stock. As a result of this information being withheld from investors, Cronos securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $12.74 per share.
Then on August 30, 2018, Citron Research published an article entitled “Cronos: The Dark Side of the Cannabis Space,” which alleged, among other things, that the Company had been “deceiving the investing public by purposely not disclosing the size of its distribution agreements with provinces – unlike every other major cannabis player” – because “the agreements are so small that they could never justify the premium investors are paying for the stock.” The article concluded that “Cronos is all talk. Last quarter, despite having the first ever license issued by Health Canada in late 2013, Cronos has vastly underperformed every big competitor.” On this news, the price of Cronos shares fell $3.62 per share, or over $28%, to close at $9.12 per share on August 30, 2018.
If you are a current shareholder and/or purchased stock between August 21, 2018 to August 30, 2018 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.
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