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Case No. 4:20cv186-RH-MJF

IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF FLORIDA

TALLAHASSEE DIVISION

MONICA ACERRA et al.,

Plaintiffs,

CONSOLIDATED

v. CASE NO. 4:20cv186-RH-MJF

TRULIEVE CANNABIS CORP. et al.,

Defendants.

_____________________________/

ORDER OF DISMISSAL

These are two consolidated proposed class actions for money damages under 

the Private Securities Litigation Reform Act. The plaintiffs are individuals who 

purchased Trulieve Cannabis Corp. securities. The defendants are Trulieve, its 

chief executive officer Kim Rivers, and its former chief financial officer Mohan 

Srinivasan. 

The second amended complaint alleges the defendants made material 

misstatements or omissions about the quality of Trulieve’s marijuana growing

facilities and about related-party transactions. The second amended complaint 

further alleges that once these misstatements or omissions were revealed, 

Trulieve’s stock price dropped. The defendants have moved to dismiss. 

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Case No. 4:20cv186-RH-MJF

I

Trulieve is a vertically integrated medical-marjuana company. It grows, 

cultivates, processes, and distributes medical marijuana and marijuana products in 

Florida. Trulieve’s common stock trades on the Canadian Securities Exchange and 

on an over-the-counter market known as the OTCQX.

A prior order dismissed the first amended complaint but granted leave to 

amend further. The order set out the governing standards. One ground for dismissal 

was the failure to allege a sale on a domestic exchange or within the United States. 

The second amended complaint cures that deficiency. Another ground for 

dismissal was failure to adequately allege a material misstatement or omission and 

scienter. For the most part, the second amended complaint is a reprisal of the first 

amended complaint’s allegations, which remain deficient for the reasons set out in 

the prior order. 

The second amended complaint adds only three new allegations of a material 

misstatement. Only one is sufficient, and for that one, the second amended 

complaint fails to adequately allege scienter. This order grants the motion to 

dismiss.

II

The second amended complaint’s new allegations of misstatements are the 

following.

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Case No. 4:20cv186-RH-MJF

First, the second amended complaint alleges that Trulieve’s website included 

this statement: “Trulieve products are hand-grown and specially cultivated in a 

state-approved, climate-controlled environment to ensure purity and safety. We 

leave nothing to chance while letting nature do her work.” The second amended 

complaint alleges that, in fact, most of Trulieve’s marijuana was grown in 

structures the plaintiffs perjoratively call “hoop houses”—structures that are not 

heated or air conditioned. The defendants note that the website did not say 

Trulieve’s products were grown only in climate-controlled facilities, but that is the 

import of the statement. At least as most people would understand the term 

“climate controlled,” an outdoor facility in Florida with no heat or air-conditioning 

does not measure up. One might well doubt that an investor would give much 

weight to this statement on the website, but at the pleading stage, at least, this is a 

sufficient allegation of a material misstatement. 

Second, the second amended complaint alleges that a magazine article 

quoted the chief executive officer, Ms. Rivers, as saying, “To get the highest 

quality product in Florida’s climate, . . . we wanted to control the environmental 

factors.” This is not a material misstatement. Every farmer who ever tilled the soil 

wanted to control environmental factors to some extent. And a hoop house, even if 

as poor a substitute for a greenhouse as the plaintiffs allege, controls the 

environment to some extent. 

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Case No. 4:20cv186-RH-MJF

Third, the second amended complaint alleges that Trulieve said in regulatory 

filings: “Trulieve is working to rapidly and substantially increase its greenhouse 

capacity.” The plaintiffs say this was misleading because Trulieve was working 

only to increase its hoop-house capacity. But the challenged statement came later 

in a paragraph that first said Trulieve “grows in enclosed structures operating both 

indoor and greenhouse style grows.” In context, a reasonable investor would 

understand the reference to “greenhouse capacity” to relate back to “greenhouse 

style.” The second amended complaint, like the first, asserts it is misleading to 

refer to hoop houses as “greenhouse style,” but as set out in the prior order, that is 

not so. The plaintiffs do not deny that Trulieve was working rapidly and 

substantially to increase its hoop-house capacity. The challenged statement was not 

materially misleading.

In sum, for the reasons set out in the prior order and this order, the only 

adequate allegation of a material misstatement is the website statement that 

Trulieve products were grown in a “state-approved, climate-controlled 

environment.” 

III

Under the Private Securities Litigation Reform Act, a complaint in a private 

securities-fraud class action seeking money damages—this includes the cases at 

bar—must adequately allege scienter. This means the complaint must, “with 

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Case No. 4:20cv186-RH-MJF

respect to each act or omission” giving rise to a claim, “state with particularity 

facts giving rise to a strong inference that the defendant acted with the required 

state of mind.” 15 U.S.C. § 78u–4(b)(2). The required “strong inference” must be

“cogent and at least as compelling as any opposing inference one could draw from 

the facts alleged.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 325

(2007). 

Here the required state of mind is “an intent to deceive, manipulate, or 

defraud, or severe recklessness.” Brophy v. Jiangbo Pharms., Inc., 781 F.3d 1296, 

1302 (11th Cir. 2015) (internal citation and quotation marks omitted). The 

plaintiffs thus were required to plead “with particularity” facts giving rise to a 

“strong inference” that the defendants “either intended to defraud investors or were 

severely reckless when they made the allegedly materially false or incomplete 

statements.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1238 (11th Cir. 2008).

As set out above, the second amended complaint adequately alleges only a 

single material misstatement: the website’s statement that Trulieve’s marijuana 

was grown in a “climate-controlled environment.” The second amended complaint 

does not allege with particularity—or even generally—facts suggesting the 

individual defendants had any role in drafting or approving the website’s “climatecontrolled” language or even knew about it. One might reasonably expect a 

website statement of this kind—barely more than puffery—to be drafted and 

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maintained at a lower level. Considering the aggregated facts in relation to each 

defendant and with respect to each violation, there is simply not enough to 

establish a strong inference of scienter. 

Trulieve could of course be held liable based on acts or omissions not just of 

the named individual defendants but also based on acts or omissions of another

officer or employee, so long as the officer or employee acted with the requisite 

state of mind. But here, as in Mizzaro, the plaintiffs have not alleged scienter of the 

corporate defendant based on the knowledge or intent of any other officer or 

employee. The second amended complaint does not allege the existence of any 

individual, whether known or unknown, who both drafted or approved the 

website’s “climate-controlled” statement and acted recklessly or with intent to 

defraud. And it is by no means obvious—there is no “strong inference”—that any 

such person exists. The second amended complaint gives no reason to believe any 

single person must both have been aware of the website’s precise language, on the 

one hand, and aware of precisely what kind of facilities were out in the field. 

In sum, the second amended complaint does not adequately allege scienter 

for the only material misstatement it adequately alleges.

IV

Two facts that have not affected this decision perhaps bear noting. First, the 

second amended complaint does not allege the individual defendants sold any 

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stock while the price was allegedly inflated by the alleged misstatements at issue. 

Second, while the second amended complaint alleges the stock price decreased as a 

result of the alleged misstatements, the price has since increased substantially. The 

second amended complaint alleges no facts suggesting the individual defendants 

believed the stock was overvalued—or that it was. 

V

The second amended complaint, like the first, fails to state a claim on which 

relief can be granted. The plaintiffs have been given two opportunities to amend 

and have not suggested they could allege anything more. They surely included in 

the second amended complaint all pertinent facts they could properly allege. In the 

absence of additional facts—the plaintiffs have suggested none—any further 

amendment would be futile. This order thus does not grant leave to amend yet 

again.

IT IS ORDERED:

1. The motion to dismiss, ECF No. 41, is granted. 

2. The clerk must enter judgment in each of the consolidated cases and close 

the files.

SO ORDERED on December 30, 2021.

s/Robert L. Hinkle

United States District Judge

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