In our recent article on securities litigation in the burgeoning legal cannabis industry, we noted that companies in this space must be careful and thoughtful in their disclosures to avoid securities litigation exposure. In the past month, at least three additional securities litigation complaints were filed against companies connected to the legal cannabis industry, including pre-M&A disputes in the Southern District of New York and a putative class action under the Securities Exchange Act of 1934 in the Eastern District of New York. These complaints underscore that while the legal cannabis industry may be relatively new, companies looking to pursue an M&A deal or other transactions in this space must be cognizant of securities litigation risks.
Tilray and Helix – Commonplace Pre-M&A Complaints Alleging Misstatements or Omissions in Proxy Statements
Two of the recently-filed suits involved forthcoming merger and acquisition shareholder votes.