Another proposed class action has commenced against cannabis-producer Aphria, but it could take a while before it's certified by a judge.

Rochon Genova LLP says the suit is on behalf of people who purchased Aphria shares between Jan. 29, 2018 up to and including Nov. 30, 2018.

Back in December, Koskie Minsky LLP also announced a proposed class action against the Leamington company.

Both suits allege Aphria did not make adequate disclosures to shareholders regarding its acquisitions of assets in Colombia, Argentina and Jamaica.

In December, short-sellers alleged that Aphria spent millions on subsidiaries that didn't add any value to the company, which only benefited insiders at companies that were bought up. (Evan Mitsui/CBCNews)

"The kind of allegations that have been made are not great," said Jay Strosberg, partner at Strosberg Sasso Sutts LLP, a firm which focuses on class action suits based in Windsor and Toronto.

In a statement, Joel P. Rochon, managing partner at Rochon Genova, said "proper disclosure levels the playing field among all investors" and that "accurate and timely public disclosure is the lifeblood" of capital markets.

Were acquisitions worthless?

In early December, short-sellers Quintessential Capital Management and Hindenburg Research alleged that Aphria's acquisition of the LATAM holding assets in Colombia, Argentina and Jamaica totaling $280 million from Scythian Biosciences were "largely worthless."

The allegations drastically affected Aphria's stock prices, causing them to drop 30 per cent.

Then in January, a Bloomberg report questioned those short-sellers' allegations, after a reporter found assets in Jamaica that were claimed by short-sellers to be inoperational.

In January, Bloomberg questioned those short-seller allegations after a reporter found assets that the short-seller had doubts about previously. (Nicholas Pham/Radio-Canada)

Strosberg said these proposed class actions launched against Aphria are different from usual shareholder class actions — where financial statement misrepresentation or accounting errors are commonplace.

But with Aphria, it's about transparency.

"This isn't just an accounting error. These are very serious allegations."

Class action timeline

Plaintiffs can hope their case will be heard by a judge within a year and a half's time to determine if it will be certified, said Strosberg.

For the class actions to be certified, plaintiffs need to convince the judge that "Aphria, or its management, made misleading statements or failed to give investors full and complete information."

Some of that evidence plaintiffs can bring include the information that the short-sellers have, according to Strosberg.

But if plaintiffs want to find their own evidence on Aphria's disclosure, he said, "it's not going to take a tremendous amount of an investigation to marshal those facts and present it to the court."