KushCo Holdings Inc.'s directors and officers misled investors about material accounting errors, a May 31 shareholder derivative suit says.

The marijuana product packaging firm didn’t properly account for the costs of several 2017 and 2018 mergers with other cannabis companies, the complaint filed in the U.S. District Court for the Central District of California says.

“Once our new CFO noticed the error, which was a complex accounting error missed by several entities, we immediately took the proper steps to notify...