Marijuana producer Aurora Cannabis was hit with a shareholder class action lawsuit in New Jersey federal court Thursday after analysts were caught off guard by plummeting sales.
The Canadian company, which began trading on the New York Stock Exchange in October 2018, has operations in 24 countries. Aurora and Coca-Cola announced in September that they were studying the market for cannabis-infused beverages. But on Nov. 14 Aurora said its sales had fallen 25% and marijuana sales to consumers fell 33% in the three months ending on Sept. 30.
The company also said it was halting spending on construction of production facilities in Alberta, Canada, and Odense, Denmark. That came six weeks after the company made optimistic statements about the completion of those facilities.
The investor lawsuit, filed by Laurence Rosen of the Rosen Law Firm, says Aurora never gave any hint in public statements of a substantial decrease in sales before the Nov. 14 announcement.
The lawsuit also claims the company made “materially false and misleading statements” during that period under the Securities Exchange Act of 1934. The suit seeks to recover damages on behalf of parties who acquired Aurora stock between Sept. 11 and Nov. 14.