An Ontario court has certified a series of related class actions — alleging that a cannabis company, Wayland Group Corp., misled investors about its plans to expand one of its growing facilities — to facilitate a proposed settlement.
According to a decision of the Ontario Superior Court of Justice, the plaintiffs in three related class actions against Wayland, several former officers and directors, and the company’s underwriters, Canaccord Genuity Corp. and GMP Securities L.P. (now known as RF Securities Clearing LP), asked the court to certify the cases as class actions to enable a settlement of all three cases.
The cases, which would be dealt with in a single proposed settlement, all involve allegations that, between mid-December 2017 and early August 2019, Wayland Group (formerly known as Maricann Group Corp.) misled investors about the status of expansion plans at an cannabis facility to induce investors to buy its stock.
Ultimately, the company corrected its disclosure, but the stock fell and the company was delisted.
The allegations have not been proven, but the court certified the cases as class actions on the basis that there is a potentially viable claim.
“The material facts as pleaded in the three actions make it clear that there is a viable cause of action at common law for misrepresentation in the primary market for Wayland securities and … for misrepresentation in the secondary market,” the court said.
Additionally, given the company’s initial disclosures and its subsequent corrections, the court concluded that there’s a common issue for the three cases — and that, as the cases involve claims on behalf of many small investors, these cases are also suitable to be pursued as class actions.
A hearing to consider the proposed settlement is now scheduled March 9 in Toronto.
The court also noted that there’s one defendant who is not part of the proposed settlement, Wayland’s former CEO, Benjamin Ward. A hearing on a motion for a default judgment against him is set for March 10, the court said.