The Ontario Superior Court of Justice certified the class action brought by Harpreet Badesha against Cronos Group Inc. and its executives.
The claim alleges misrepresentation under the Ontario Securities Act (OSA), s. 138.3, regarding Cronos’ financial disclosures in 2019.
The class includes all investors who acquired Cronos shares in the secondary market between May 9, 2019, and March 30, 2020.
The court rejected the defendants’ forum non conveniens argument, allowing U.S.-based shareholders to be included in the Ontario class action.
Cronos previously settled regulatory actions with the Ontario Securities Commission (OSC) and the U.S. Securities and Exchange Commission (SEC), admitting to overstating revenue and inadequate financial controls.
The defendants were ordered to pay $125,000 in costs to the plaintiff?.
2025 ONSC 743 Decision:
The plaintiff sought to examine Anna Shlimak, a former investor relations consultant for Cronos, as part of the discovery process.
The court denied the request, ruling that the defendants had already fulfilled their obligations by producing CEO Michael Gorenstein as Cronos’ representative.
The court found that Gorenstein had prepared thoroughly and that the plaintiff had voluntarily foregone an extra day of discovery with him.
The plaintiff was given the option to submit written interrogatories to Gorenstein, including questions related to Shlimak’s knowledge.
The plaintiff was ordered to pay $10,000 in costs to the defendants?.
Final Outcome Based on Both Decisions:
The class action remains certified, with both Canadian and U.S. shareholders included.
The plaintiff was successful in certifying the class action and resisting the forum non conveniens motion.
However, the defendants successfully opposed additional discovery against a former consultant.
The net costs awarded:
Plaintiff won $125,000 in the 2023 decision.
Plaintiff had to pay $10,000 in the 2025 decision.
Final net costs awarded to the plaintiff: $115,000??.
