Auxly Cannabis Group Inc. (TSXV: XLY, FRA: 3KF, OTC: CBWTF)
Ontario Superior Court of Justice, Court File No: CV-19-00617136-ooooCP
This securities class action relates to the Defendant releasing core documents and making other statements containing misrepresentations about the status of, delays to and completion date for the renovations being made to the facility in Cobourg, Ontario (the “Facility”) pursuant to the agreement Auxly had with FSD Pharma, Inc. (“FSD”), as well as misrepresentations Auxly made about the date for planting of first harvest of cannabis at the Facility.
Between February 6 and 8, 2019, Auxly and FSD released a series of statements announcing that Auxly was materially behind schedule with the renovations to the Facility, and that the agreement between Auxly and FSD had been terminated. These public corrections of the Company’s past misrepresentations caused immediate and significant damage to Auxly’s shareholders, resulting in Auxly’s stock price on the TSXV dropping by more than 22.8% in just a few days.
The scheduled motion for leave to proceed has been rescheduled to now take place on April 27, 28 and 29, 2021. Motion materials have been exchanged and cross-examinations completed. The plaintiff’s moving factum is due February 26, 2021.
The newly scheduled motion for leave to proceed adjusts the statutory class period (but not the common law class period) to strengthen the claims made on behalf of investors. Now, the statutory claim focuses on those misrepresentations made in quarterly documents certified by the company to not contain misrepresentations. The common law claim continues to seek damages for misrepresentations made on September 20, 2018.
Should the Court grant leave to proceed with the statutory claim, the Plaintiff will seek certification of both the statutory and common law claims.