Canopy Growth Corp 10-Q

Item 1. Legal Proceedings. As previously disclosed in the Annual Report, in November 2019, the Company and certain of its current and former officers were named as defendants in a purported class action lawsuit filed in the U.S. District Court for the District of New Jersey (the “Court”). The plaintiffs allege that the defendants made false and/or misleading statements and/or failed to disclose material adverse facts, regarding Canopy Growth’s receivables, business, operations and prospects relating to, among other things, the demand for its softgel and oil products. In November 2020, the defendants moved to dismiss the plaintiff’s second amended complaint and on May 6, 2021, the Court granted the defendant’s motion to dismiss, without prejudice to the plaintiffs filing a third amended complaint with the Court within 30 days. On June 14, 2021, the plaintiffs filed their third amended complaint. Defendants filed their motion to dismiss the third amended complaint on August 16, 2021. Pursuant to documents filed with the Court on February 4, 2022, the Company has reached an agreement to settle the class action. The agreement does not constitute any admission of liability or wrongdoing by the Company or its executives. The agreement expressly provides that the Company denies any misconduct or wrongdoing. Preliminary approval of the settlement has been granted by the Court. The agreement is subject to approval by the Court and to other terms.