Canopy Growth BioSteel shareholders allege 50% revenue revisions misled investors
A class action lawsuit alleging misstatements in financial disclosures related to Canopy Growth Corporation’s BioSteel acquisition has been certified by the Ontario Superior Court of Justice, allowing the case to proceed on behalf of shareholders.
Canopy Growth, which was founded in Smiths Falls and remains one of Canada’s most prominent cannabis companies, is named as a defendant in the lawsuit, along with former senior executives involved in approving the disclosures.
The lawsuit focuses on financial reporting in 2022 and 2023, during which Canopy issued multiple corrective disclosures revising previously reported revenue, growth and receivables tied to BioSteel, a sports nutrition brand acquired by the company. The plaintiffs allege those revisions followed material misstatements that misrepresented BioSteel’s financial performance.
Court filings show BioSteel revenue figures were revised downward across several reporting periods, with some reductions exceeding 50 per cent. Growth rates and receivables were also materially reduced in subsequent disclosures.
Canopy has acknowledged that misstatements were made in its financial statements. The company disputes, however, that those misstatements caused losses to shareholders.
The proposed class action was initially filed in June 2023. In December 2025, the court certified the lawsuit, finding the claims raise common issues suitable for a class proceeding. Certification does not determine liability or damages, but allows the case to move forward as a collective action rather than through individual claims.
The statement of claim names Canopy Growth as well as former chief executive officer David Klein and former chief financial officer Judy Hong, consistent with securities law requirements related to financial disclosure oversight. The allegations have not been proven in court.
The plaintiffs argue the pattern of revisions created a misleading picture of BioSteel’s performance and affected investor decision making. Canopy maintains the corrective disclosures did not materially impact its share price or investor losses.
In an email response, Laura Nadeau, Canopy Growth’s director of communications, told Hometown News on Jan. 5, that the company would not comment further.
“As this matter is still ongoing and before the courts, Canopy Growth will not provide further comment at this time,” Nadeau said.
The litigation remains before the court, with no trial date or settlement announced.
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