Sundial Growers Inc. Class Action Lawsuit
- Company Name
- Sundial Growers Inc.
- Stock Symbol
- Class Period
- Purchasers of Sundial securities pursuant to the Company’s August 1, 2019 initial public offering
- Motion Deadline
- November 24, 2019
- Southern District of New York
On September 25, 2019, the Sundial Growers Inc. class action lawsuit was filed charging Sundial, certain of its officers and directors, and the underwriters of its August 1, 2019 initial public offering (“IPO”) with violations of the Securities Act of 1933. The Sundial class action lawsuit was commenced in the Southern District of New York on behalf of purchasers of Sundial securities pursuant to the Company’s IPO and is captioned Huang v. Sundial Growers Inc., No. 1:19-cv-08913.
Sundial is a licensed cannabis producer based in Alberta, Canada. According to Sundial, it combines “tried-and-true heartland farming with innovative horticultural techniques to grow a select range of cannabis strains” and is focused on “consistency – a pure cannabis experience that [its] customers can trust and count on.”
On July 30, 2019, Sundial filed an amended Registration Statement on Form F-1 with the U.S. Securities and Exchange Commission (“SEC”), which was declared effective on August 1, 2019. On August 1, 2019, Sundial filed the final Prospectus for the IPO with the SEC, which forms part of the Registration Statement. The same day, Sundial commenced its IPO, selling 11 million shares of Sundial common stock at $13 per share pursuant to the Registration Statement and Prospectus (the “Offering Documents”).
The Sundial class action lawsuit alleges that in the Offering Documents for the IPO, defendants made false and misleading statements and/or failed to disclose adverse information regarding Sundial’s business and operations. Specifically, the Offering Documents misrepresented or failed to disclose that Sundial had failed to supply saleable cannabis in line with contractual obligations to Zenabis Global Inc. and, due to material quality issues, Zenabis had rejected a total of 554 kilograms of cannabis from Sundial, valued at approximately US$1.9 million (C$2.5 million). As a result of these misrepresentations and/or omissions in the Offering Documents, defendants were able to sell 11 million shares of Sundial common stock in the IPO at an inflated price of $13 per share.
On August 16, 2019, Marketwatch reported that Sundial had sold a “half ton of pot that was returned by corporate buyer Zenabis Global Inc. because it contained visible mold, parts of rubber gloves and other non-cannabis material . . . . The attempted sale would be the equivalent of 10% of Sundial’s total second-quarter cannabis sales of five metric tons.” The article went on to state that Sundial had “included a number of risks around inventory spoilage in its IPO filing but did not include a reference to a half ton of returned cannabis,” and “Sundial did not mention the half-ton return during a road show presentation in Toronto . . . .” Since the IPO, as a result of the disclosure of this adverse material information, the price of Sundial stock has declined substantially, and by October 1, 2019, the price of the stock had fallen to less than $5 per share.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Sundial securities pursuant to the IPO to seek appointment as lead plaintiff in the Sundial class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the Sundial class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Sundial class action lawsuit. An investor’s ability to share in any potential future recovery of the Sundial class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Sundial class action lawsuit or have questions concerning your rights regarding the Sundial class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the Sundial class action lawsuit must be filed with the court no later than November 24, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.