This securities class action relates to the Defendants releasing core documents and making other statements containing material misrepresentations about the financial health of Aurora Cannabis Inc. (”Aurora”). These misrepresentations claimed that the Company’s sales of cannabis were high and that revenue was continuing to increase as a result of consumer demand, when in fact demand for cannabis was far outstripped by supply capacity at that time. Aurora also claimed that construction was progressing well at facilities meant to address this apparitional consumer demand, when Aurora in fact knew that such expanded production was not addressing a market need. These misrepresentations had the effect of distorting the investment risk and artificially inflating the Company’s perceived value and share price.

In September of 2019, the Defendant Aurora released quarterly statements (which Individual Defendants Terry Booth and Glen Ibbott certified as not containing misrepresentations), an Annual Report, and hosted an investor conference call in which the Company claimed that it expected adjusted EBITDA to improve due to higher sales, improved gross margins, and prudent Selling, General and Administrative Expenses (“SG&A”) growth, as well as strong selling of products that was already occurring at the retail level at that time. These statements also claimed that Aurora expected to see growth in its core business, and a plateau of demand between then and year end.

In October of 2019, these misrepresentations about the Company’s financial footing were compounded by news releases claiming both that construction was going well at facilities being built to capture more of the burgeoning cannabis market, and that business and sales were going well writ large.

Aurora subsequently released quarterly statements on November 14, 2019 that corrected the bullish claims made previously, by stating that:

1. 1Q 2020 sales dropped by 25%;
2. Aurora had distribution problems and that they monitor daily sales from the provinces to the retailers very carefully;
3. Aurora’s adjusted EBITDA loss for 1Q was $39.7 million compared to $26.6 million the prior quarter; 
4. The decrease in EBITDA was primarily due to decreased revenue; and
5. Aurora was halting construction of its Aurora Nordic 2 facility in Denmark and deferring final construction of its facility in Medicine Hat, Alberta.

The day after these quarterlies were released, Aurora’s common shares closed down approximately 18%, from $56.28 to $43.08 on an adjusted basis.

Finally, after a series of news articles addressed problems with demand for Aurora’s products (including Marijuana Business Daily reporting that German pharmacies were proscribed by their regulator from selling Aurora products in 1Q 2020) Aurora’s Chief Corporate Officer Cam Battley resigned.