"I mediate that a license suspension is imaginable", stated Charles Taerk, chief executive officer of Faircourt Asset Management, which runs the cannabis-focused Ninepoint Different Health Fund. Taerk lowered his holdings of CannTrust to now not as a lot as 1 per cent of his portfolio after the corporate's remaining quarterly earnings file, and supplied the remainder of his issue on Tuesday. CannTrust's violation-which included unlicensed growing in rooms it allegedly hid from inspectors with fake walls while it awaited regulatory approval-highlights the challenges cannabis companies face in balancing increasing pressure from investors to grow revenues while complying with strict Health Canada guidelines.
Vaughan, Ontario-based CannTrust Holdings Inc. disclosed on July 8 that its greenhouse facility in Pelham, Ontario, was noncompliant with certain regulations of Health Canada, which placed a hold on 5,200 kilograms, or 5.7 tons, of dried cannabis harvested from unlicensed rooms. As a part of that announcement the company said it volunteered that there may be storage problems at the Vaughan facility.
The stock closed at $4.94 on Friday, July 5. It was lately trading at $2.76 on news that all sales have been halted.
The company also said it had placed a hold on medical sales through its customers service line and online on Wednesday.
The impact on financial results is not yet known, CannTrust said. "CannTrust is working closely with the regulator through the review process and expects to provide further detail of the duration of the hold and other developments as they become available". "The Special Committee is comprised of independent members of the Board of Directors". In an unannounced inspection, regulators chanced on the corporate grew pot in unlicensed rooms, supplied "mistaken and misleading data" to inspectors and had insufficient file maintaining, consistent with Health Canada spokeswoman Tammy Jarbeau.
Canadian law gives Health Canada a number of ways to respond to non-compliance, including "suspension or cancellation of a federal license" or the issuance of a fine up to $1 million, Jarbeau said in an email.
CannTrust said Thursday it has implemented a voluntary hold on sale and shipment of all cannabis products as a precaution while Health Canada "visits and reviews" its Vaughan manufacturing facility.