The bad news keeps on coming for CannTrust Holdings Inc. (TSX: TRST; NYSE: CTST) stock holders this week. After a company whistleblower initiated a Health Canada audit and revealed CannTrust had been growing cannabis in unlicensed rooms for six months, today the company has voluntarily suspended all product sales.
That hold is in place while a regulator for Health Canada reviews the greenhouse facility in Vaughan, Ontario where the unlicensed growing took place. Commenting on the development, the company issued this statement today:
Prior to this total suspension on all sales and shipments, the company had held back more than 12,000 kg of unshipped product during the review process, which Chief Executive Officer Peter Aceto recently warned would lead to supply shortages.
The announcement about temporarily ceasing sales on a voluntary basis may sound familiar to pot stock traders, as the same process was initiated by Bonify back in January when that company was discovered to be selling unlicensed product.
Following a review from Health Canada, Bonify’s license to sell cannabis was revoked the next month, and the company’s website still displays a message about product ordering on temporary hold to this day.
In addition to the voluntary product hold, today CannTrust announced the formation of a special committee consisting of independent board members. That committee has now initiated a review process to investigate the growing of unlicensed product, which took place in five rooms at the Vaughan facility from October 2018 to March 2019.
The company’s stock has dropped more than 50% since that news broke, and is currently trading at a price of $2.72 as of Friday afternoon.
While CannTrust has stopped posting updates and responding on social media, patients with questions about how this impacts their ability to acquire cannabis prescriptions can contact the company via email at firstname.lastname@example.org or speak to a representative directly by calling 1-855-RX4-CANN.
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