fbpx
QQQ
-1.91
368.39
-0.52%
DIA
-1.32
352.14
-0.38%
SPY
-2.11
442.76
-0.48%
TLT
+ 0.70
148.12
+ 0.47%
GLD
-1.36
172.53
-0.79%

CannTrust Forms Special Committee After Licensing Debacle; Reporter Says 'A Lot' Occurring Behind The Scenes

July 22, 2019 2:18 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
CannTrust Forms Special Committee After Licensing Debacle; Reporter Says 'A Lot' Occurring Behind The Scenes

Medical and recreational cannabis producer CannTrust Holdings Inc (NYSE:CTST) said Monday that it's forming a special committee to "restore trust" after its facility was found to be non-compliant with Canadian government regulations.

What Happened

Health Canada is actively exploring what kind of enforceable action is appropriate for CannTrust, which was producing thousands of kilograms of cannabis in unlicensed rooms, BNN Bloomberg's David George-Cosh said Monday.

CannTrust set up a committee to conduct an internal investigation and make recommendations to the board and better understand any potential financial impact, according to the company. 

Benzinga's Cannabis Capital Conference heads to Detroit on Aug. 15 — click here to learn more!

Why It's Important

Analysts don't have any faith left in CannTrust, George-Cosh said, adding that one research firm suspended its coverage of CannTrust.

The cannabis industry as a whole has multiple headwinds aside from CannTrust's production violations, he said.

Most notable are the dismissal of Bruce Linton from Canopy Growth Corp (NYSE:CGC) and The Flowr Corporation (OTC:FLWPF)'s suspension of a CA$125-million ($95.3 million) capital raise, George-Cosh said. These could be considered "bearish drivers" in the cannabis market, he said. 

"At the current state of affairs, it looks like the cannabis industry needs to kind of get its act together before it reaches a maturity level." 

What's Next

Sources close to the company are saying there is "a lot of activity happening behind the scenes," including a potential for CannTrust to sell itself, George-Cosh said. But it is unclear if anyone is "comfortable" in acquiring a company that accepted Health Canada's non-compliant findings.

"These discussions, again, are preliminary and they haven't advanced according to my sources to a state where a deal would be reached," he said. "But it is interesting to note that these discussions are indeed happening at this point," he said.

CannTrust shares were down 3.07% at $2.68 at the time of publication Monday. 

Related Links:

'420 Investor' Brochstein To CannTrust CEO: Apologize And Resign

Bank Of America Double Downgrades CannTrust After Health Canada Findings

 

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to Benzinga Podcasts and our YouTube channel.

Posted-In:

Cannabis News Markets Media

Related Articles

A Complete List Of NYSE And NASDAQ-Listed Cannabis Companies (Updated)

As the cannabis industry keeps pushing forward, more companies are moving to list their stock on a major U.S. exchange like the NYSE or NASDAQ. The club, however, remains relatively small. read more

The Week In Cannabis: CT Goes Legal, O'Brien Smokes On TV, A New Extraction Giant And More

In another busy week, cannabis stocks traded up, outperforming general markets. Over the five trading days of this week: read more

The Week In Cannabis: Earnings, Financings, M&A, Cookies U, DEA, DJ Khaled, And More

In an earnings-heavy week, cannabis stocks experienced considerable volatility. read more

'Ohio Lawmakers Officially File Marijuana Legalization Bill In Historic First For The State' -Marijuana Moment

https://www.marijuanamoment.net/ohio-lawmakers-officially-file-marijuana-legalization-bill-in-historic-first-for-the-state/ read more