A class action lawsuit was filed against the marijuana producer HEXO (NYSE: HEXO) because of alleged material false information to investors and the omission of essential information about revenues, supply contracts and acquired facilities was rejected “in full”.
According to HEXO, the New York District Court agreed with its claim that plaintiffs “did not make any criminal misrepresentation or omission,” while denying claims that HEXO committed fraudulent or reckless behavior in relation to its disclosures.
However, the marijuana producer found that plaintiffs have the right to appeal the decision, even though the lawsuit was dismissed in full.
Plaintiffs brought a number of charges against HEXO, including accusing HEXO of improperly reporting inventory levels for failing to write down obsolete products that were of no value at a Niagara facility acquired by Newstrike, the reports has not obtained the appropriate licenses from Health Canada.
The lawsuits were filed against HEXO after the company presented preliminary fiscal year 2019 fourth quarter revenue results that were nearly 50% below guidelines previously issued, and withdrew guidelines for fiscal 2020 (which ended July 31) . .
HEXO described the court’s 60-page decision as a “thorough opinion” that dismissed the plaintiffs’ case by “emphatically rejecting their arguments”. If the decision is made, HEXO can continue to grow its global marijuana brand while reducing litigation costs.
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