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Recent New York Appellate Decision Highlights That Cannabis Companies Going Public are Subject to Typical Securities Litigation Risks—and Defenses | Seyfarth Shaw LLP


Cyan decision, Sundial Growers faced parallel suits in federal and state courts. 
See
In re Sundial Growers Inc. Securities Litigation, 19-cv-08913-ALC (S.D.N.Y.). A motion to dismiss has been briefed in the federal action, though a decision has not yet been issued.  To avoid duplicative state and federal litigation, we advise corporations to adopt federal forum selection provisions in their bylaws.
See Seyfarth Shaw LLP,
Sundial Growers issued a defense friendly decision which was affirmed by the Appellate Division.
Dismissal of New York State Complaint
The complaint filed in New York state court alleges that the company misled investors by stating it was a producer of “high-quality” and “premium” cannabis when, allegedly, there were issues with cannabis quality, including an alleged incident in 2018 where a large order was returned. ....

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