SAN DIEGO & EDMONTON, Alberta–(BUSINESS WIRE)–Shareholder rights law firm Robbins LLP announces that a purchaser of Aurora Cannabis, Inc. (NYSE: ACB) has filed a class action complaint against the company’s officers for alleged violations of the Securities Exchange Act of 1934 between February 13, 2020 and September 4, 2020. Based in Edmonton, Canada, Aurora produces and distributes medical cannabis products worldwide.
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Aurora Cannabis, Inc. (ACB) Accused of Failing to Disclose Sizable Impairment Charges
According to the complaint, during the relevant period, Aurora Cannabis, Inc. failed to disclose that it had significantly overpaid for recently acquired assets while the value of others depreciated. When Canada passed the Cannabis Act in 2018 and reshaped the marijuana industry, Aurora completed a series of acquisitions intended to strengthen its position in the marketplace, including the purchase of MedReleaf, a medical cannabis producer, for 3.2 billion Canadian dollars. Aurora encountered issues such as regulatory delays, overproduction, and black market competition. On February 6, 2020, Aurora issued a press release detailing its business transformation plan, aimed at better aligning the company with the “current realities of the cannabis market.” However, the plan was inadequate in addressing the company’s situation. The plan’s shortfall was even further evident after Aurora’s September 8, 2020 press release, which revealed that the company expected to record $1.8 billion in goodwill charges in 2020’s fourth quarter, including up to $90 million in fixed asset impairment charges, and $140 million to carry the value of certain inventory. On this news, Aurora stock price fell 11.63% to close at $7.52 per share on September 8, 2020.
If you purchased Aurora Cannabis, Inc. (ACB) securities between February 13, 2020 and September 4, 2020, you have until December 1, 2020, to ask the court to appoint you lead plaintiff for the class.
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