The plaintiff sought leave to proceed with a putative shareholders' class action for secondary market liability under s. 138.3 of the Securities Act.
The claim alleged that the defendant made material misrepresentations regarding a cannabis facility build-out project and joint venture, which were later publicly corrected, causing a significant drop in share price.
The court found the action was brought in good faith and that there was a reasonable possibility of success at trial, rejecting the defendant's expert economic evidence that the market had already absorbed the news.
Leave to proceed was granted.
