Cronos Group Reportedly Under SEC Investigation, Targeted In Shareholder Class Action Lawsuit

In the last two months, Cronos Group, Inc. CRON has twice postponed submitting the filing of its 2019 financial results.

On March 2, the company informed investors that it is unable to complete its financial report and statements for fiscal 2019 because its audit committee was researching a few bulk resin purchases and product sales through the wholesale channel.

A week later, Cronos sent an email to its staff from a company lawyer asking them to keep specific records due to a “confidential and non-public inquiry by the Securities and Exchange Commission,” according to MarketWatch

The records marked for preservation include those related to bulk resin purchases and wholesale sales. They also include records tied to transactions and dealings with MediPharm Labs Corp. MEDIF, TerrAscend Corp. TRSSF, Heritage Cannabis Holdings Corp CANN, 48North Cannabis Corp NCNNF, MarketWatch reported.

On March 17,  Cronos said its audit committee is restating its unaudited interim financial results for the first, second and third quarters of 2019. 

Cronos said it will lower its revenue for the quarter ended March 31, 2019, by CA$2.5 million ($1.75 million), and for the quarter completed Sep. 30, 2019 by CA$5.1 million.

Cronos, the SEC, 48North, Heritage Cannabis and MediPharm declined MarketWatch's requests for comment, according to the publicaiton, while TerrAscend did not respond to MarketWatch. 

Tobacco company Altria Group Inc MO took a 45% stake in Cronos in 2018. 

Shareholder Lawsuit Filed Against Cronos

A securities litigation firm, Block & Leviton LLP, said Friday that it is investigating whether Cronos has “misled its shareholders,” urging investors who have lost money to contact the firm. 

A shareholder class action has been filed against Cronos by investors who acquired the company’s shares in the period between May 9, 2019, and March 2, 2020, according to a press release.

The stock was trading 0.43% higher at $5.90 at the time of publication Friday. 

Related Link: 

Cronos Analyst Sees 'Compelling Value,' Upgrades Pot Stock Amid Delay In Financials

Posted In: CannabisNewsLegalSECMarketsMediaMarketwatch
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Benzinga Cannabis Capital Conference is coming to Florida

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on bzcannabis.com – Prices will increase very soon!


Loading...