b'CASES GOODWINthe company was deceiving the investing public by The court concluded that plaintiffs metpurposely not disclosing the size of its distribution the heightened pleading standard andagreements with provinces, which were so small they sufficiently identified the misleadingcould never justify the premium investors are paying for the stock. The same day the report was published the statements with particularity and whycompanys share price fell by over 28%. they were misleading. The court furtherOn September 4, 2018, an investor filed a putative concluded that the primary issue wasclass action against the company and its executives whether a reasonable investor would havealleging violations of Sections 10(b) and 20(a) of the believed that a patent remain[ed] pendingExchange Act and Rule 10b-5 for alleged false and after a final rejection given the defendantsmisleading statements made in connection with the characterization of the chewing gumsize of the companys distribution agreements and product as patent-pending or patent- positive statements regarding its business, operations and prospects. On November 29, 2018, two related protectable, which had required discoverycases were consolidated, and plaintiff Chanda and his and expert testimony in similar cases, andcounsel were appointed lead plaintiff and lead counsel was, therefore, beyond the scope of anrespectively. In January 2019, lead plaintiff filed a notice appropriate inquiry into defendants motion. of voluntary dismissal without prejudice.Namaste Technologies, Inc.: Kevin McCormick Further, as to plaintiffs allegations of a violation ofv. Namaste Technologies Inc., et al., Case No. Section 20(a) of the Exchange Act, the court concluded2:18-cv-08616-FMO-JC (C.D. Cal., Oct. 6, 2018)that because plaintiff adequately alleged a primaryNamaste Technologies, Inc. (Namaste) serves as violation of securities law, it would deny defendantsan online platform for the sale of cannabis-related motion to dismiss on this ground as well. The courtproducts such as vaporizers and other accessories.also rejected defendants motion to dismiss based on their claims that the PSLRA limited plaintiffs damagesIn November 2017, Namaste issued a press release because there was no basis for its application on astating that they planned to sell its U.S. subsidiary, motion to dismiss a Section 10(b) claim, in additionDollinger Enterprises US Inc. (Dollinger Enterprises), to rejecting defendants contention that the allegedin order to focus on legal cannabis markets. Shortly misleading statements were non-actionable forward- thereafter, Sean Dollinger, CEO of Namaste, held a looking statements. conference call and offered confirmation that the sale of Dollinger was at arms length. In January 2020, defendants answered the complaint. The case is ongoing. Plaintiffs filed a putative class action alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Cronos Group, Inc.: Manik Chanda, et al. v.Rule 10b-5 in connection with allegedly false and Cronos Group, Inc., et al., Case No. 1:18-cv- misleading statements related to the sale of Dollinger 08047-NRB (S.D.N.Y., Sept. 4, 2018) Enterprises. The claims in the class action were based Cronos Group, Inc. (Cronos) is a Canadian-basedon a report from Citron Research. Specifically, in an company that focuses on offering production andOctober 2018 Citron Research report, it was alleged distribution platforms of medical marijuana and thethat the sale was not at arms length and instead, cultivation of cannabis oil. Namastes CEO sold Dollinger Enterprises to other Namaste executives.On August 21, 2018, the company announced thatThe parties engaged in motion practice related to the it secured major provincial supply agreements thatappointment of counsel and lead plaintiff, however, in would assist them in serving the Canadian recreationalDecember 2018, plaintiffs filed a notice of voluntary market. Shortly thereafter, Cronos was targeted bydismissal.Citron Research, which released a report alleging that 8'