Aurora Cannabis Faces Class-Action Lawsuit, Closing of Edmonton Facility


<![CDATA[Canadian cannabis giant Aurora Cannabis is grabbing headlines this month due to a class-action lawsuit and news that the company will shutter its Aurora Polaris facility in Edmonton, Alberta.The suit, originally filed in late 2019 and amended in a U.S. District Court in New Jersey on Sept. 7, alleges that Aurora employed a fraudulent scheme to inflate one of its 2019 quarterly earnings results. This scheme, the plaintiffs claim, involved Aurora selling millions of dollars’ worth of cannabis back to itself through Radient Technologies, an Edmonton-based cannabis extraction company that Aurora had “significant influence over,” according to the complaint.Aurora has a 12% ownership stake in Radient Technologies, as well as a seat on its board, as noted in the complaint.In a June 2019 deal with Radient Technologies that “lacked commercial substance,” according to the complaint, Aurora allegedly sold $21.7 million worth of dried cannabis to Radient Technologies and then repurchased that same amount of product back from the company in a scheme that the plaintiffs claim artificially inflated Aurora’s 2019 fourth quarter adjusted earnings.The lawsuit claims that Aurora then continued to misrepresent the true condition of the business, “causing the prices of Aurora’s common stock to be artificially inflated,” according to the complaint.Aurora’s stock has since plunged by more than 90% since mid-2019, according to a BNN Bloomberg report.The complaint claims that Aurora has violated the U.S. Exchange Act and requests a trial by jury.A spokesperson for Aurora told Cannabis Business Times that the company does not comment on legal matters, but said, “We maintain our standard of business practice is in accordance with all relevant securities law and fulfill any obligation to respond accordingly.”Meanwhile, the company announced Sept. 22 that it will shutter its Aurora Polaris facility in Edmonton in an effort to consolidate operations, according to a CBC…

Excerpt only …
Source : Aurora Cannabis Faces Class-Action Lawsuit, Closing of Edmonton Facility

reposted by Cannabis News World

This site uses Akismet to reduce spam. Learn how your comment data is processed.