Weedmaps Technology Inc. disclosed Thursday that it has reached an agreement in principle to settle a proposed investor class action accusing the company of inflating its monthly average users metric after going public.
In a court notice, attorneys for Weedmaps and lead plaintiff Seret Ishak said they intend to formalize the settlement and file a motion for preliminary approval by April 13. The filing did not disclose financial or other terms of the agreement.
The parties also asked the court to refrain from ruling on pending motions to dismiss and to stay all proceedings while they prepare the motion for preliminary approval — effectively pressing pause on the litigation as they craft the final settlement framework.
Allegations Tied to SEC Cease-and-Desist Order
The lawsuit, filed in October 2024, followed a cease-and-desist order issued by the U.S. Securities and Exchange Commission.
In that order, the SEC alleged that Weedmaps misreported its active user figures. According to regulators, the company counted individuals who landed on a third-party website and were automatically redirected to Weedmaps’ platform — even if those visitors did not actively engage with the site.
The plaintiff contended that the reporting practices inflated key performance metrics, potentially misleading investors about the company’s growth trajectory after it entered public markets.
In September, Ishak opposed motions to dismiss filed by Weedmaps and former officers of Silver Spike Acquisition Corp., the special purpose acquisition company involved in taking Weedmaps public.
