Less than a month after short seller Grizzly Research published a report claiming that Trulieve Cannabis Corp (OTC: TCNNF) is “a fraud,” Trulieve has filed a lawsuit against Grizzly Research, GeoInvesting, GeoInvesting analyst Siegfried Eggert and two other men alleging the group libeled the cannabis company and violated several laws in compiling and releasing the report.
The Short Report
In Grizzly’s original report on Trulieve in December, the short seller accused Trulieve of producing low-quality cannabis and suggested the husband of Trulieve CEO Kim Rivers is “at the very center of the FBI probe” and “the right-hand man of disgraced politician Scott Maddox.”
Grizzly called Rivers and Trulieve “crooks” and said the company has “outright lied” in its financial disclosures and used “accounting maneuvers” to deceive investors.
In an official statement following the report, Trulieve said it “sells high quality flower” and stands behind the quality of its products.
Trulieve shares initially dropped 12.6% following the release of the report and remain down about 3% overall since its release.
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On Friday, Trulieve responded by filing a lawsuit against Grizzly in Gadsden County, Florida.
Grizzly trespassed on Trulieve's Florida property and used drones to illegally surveil its operations. In addition, the lawsuit accuses Grizzly of defaming both Trulieve and Rivers and violating Florida’s Deceptive and Unfair Trade Practices Act.
“The report contains numerous false statements of fact made for the sole purpose of harming Trulieve’s reputation and driving its stock price down so that Grizzly’s and GeoInvesting’s owners, officers, directors, employees, agents, and affiliates, as well as other coconspirators believed to be individual investors and/or investment funds or firms engaged in short-selling Trulieve stock, can profit from the decline in share price caused by the false report,” the lawsuit said.
Rivers issued an accompanying statement addressing the lawsuit on Trulieve's website.
“This lawsuit represents Trulieve’s firm stance against such false and misleading reports,” the CEO said.
Grizzly Research did not immediately respond to Benzinga’s request for comment.
At least in the court of public opinion, Grizzly’s original accusations against Trulieve don’t seem to be carrying much weight given the stock is down just 3% since the report was released. Regardless of whether the court rules Grizzly acted illegally, Trulieve stock appears to have suffered minimal damage from the report.
The outcome of the lawsuit may not ultimately have much impact on Trulieve’s share price, but a win would certainly be satisfying for the company and its investors.
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Trulieve Cannabis Responds To Short Seller, Plans To Take Legal Action
Photo courtesy of Trulieve.
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