Cannabis Litigation: Curaleaf Wins Dismissal of Securities Class Action Lawsuit
Curaleaf received some good news in mid-February when a federal court dismissed a class action lawsuit alleging it violated federal securities laws. We wrote about this lawsuit when it was first filed in August 2019 and have tracked various issues involving Curaleaf in other posts (see links below). The decision by Judge Cogan of the Eastern District of New York reflects the importance for companies selling CBD products to make fulsome, appropriate, and timely disclosures in their securities filings.
A motion tests the sufficiency of a complaint, as my colleague Jihee Ahn recently explained. This means a complaint must contain enough factual matter that, if true, states a claim that would allow a court to reasonably infer that the defendant is liable. A motion to dismiss a complaint then, in essence, argues to the court that even if the facts alleged in the complaint were true, the plaintiff has not established a legal ground for liability and so the complaint should be dismissed.
With that bit of background let’s review a few salient facts. Curaleaf was created in 2018 through a reverse takeover between a Canadian company and Delaware company and is listed on the Canadian Stock Exchange. On October