HEXO Corp (“HEXO”, or the “Company”) (TSX: HEXO; NYSE: HEXO) announced today that it has won a dismissal of the securities class action pending in the Commercial Division of the Supreme Court of the State of New York, New York County. As previously disclosed, HEXO and certain of its current and former officers and directors were named in shareholder class action lawsuits filed in the Southern District of New York; the Commercial Division of the Supreme Court for the State of New York, New York County; and the Province of Quebec. The suits alleged that HEXO made material misstatements and omitted material information in its prior disclosures to investors regarding various issues, including but not limited to its estimated sales revenues during Q4 2019 and fiscal year 2020, its supply agreement with the SQDC, and the facilities acquired from Newstrike.
The Southern District of New York previously dismissed the U.S. federal securities class action in that venue on March 8, 2021. No appeal was taken from that dismissal.
Following oral argument on June 3, 2021, Justice Andrew Borrok of the Commercial Division of the Supreme Court of the State of New York, New York County granted HEXO’s motion to dismiss the state court securities class action. The court agreed with HEXO that the plaintiffs “fail[ed] to identify any facts which were known or should be known which rendered the offering documents materially misleading at the time they were issued.” Plaintiffs have a right to appeal.
“We are pleased that a second U.S. court has now determined that the U.S. securities class action claims against HEXO are without merit,” said HEXO General Counsel Roch Vaillancourt. “While the Quebec litigation remains pending, today’s ruling should further help reduce our litigation burden as we continue closing and integrating our recent acquisitions, to pursue our goal of becoming a top-three global cannabis products company.”