Another class action lawsuit filed in U.S. against Sundial for failing to disclose client return of a half-ton of cannabis
Shareholders filed another class action against Nasdaq-listed cannabis producer Sundial Growers Inc. SNDL, -3.35% Friday for allegedly failing to disclose that Zenabis Global Inc. ZENA, -2.70% returned 554 kilograms of weed because it was un-sellable. The allegations were first reported by MarketWatch in August. The returned marijuana contained mold, bits of rubber gloves, among other non-cannabis materials and was returned by Zenabis, according to people familiar with the matter. The batch was worth approximately C$2.5 million ($1.9 million) at the time. The class action suit, filed in the Southern District of New York, alleges that Sundial’s prospectus did not “disclose that: (i) Sundial failed to supply saleable cannabis in line with contractual obligations to Zenabis; and (ii) because of material quality issues, Zenabis had to return or reject a total of 554 kg of cannabis from Sundial, valued at approximately US$1.9 million (C$2.5 million).” In a separate court filing Friday, the plaintiff said that the lawsuit was related to another lawsuit filed against Sundial earlier this month. The Alberta-based company called the prior class action suit’s allegations “baseless.” Sundial shares SNDL, -3.35% were down 2.2% in early afternoon trading Friday, as the ETFMG Altnerative Harvest ETF MJ, -2.58% gained 1.1%.
Maxa. Cherney | Reporter