CannTrust Tanking After Health Canada Puts Sales on Hold for Non-Compliant Growing

CannTrust Holdings (TSX:TRST) (NYSE:CTST) has let its customers know to expect production shortages after Health Canada put a hold on more than 5,000 kilograms of its cannabis. The company has also chosen to put a hold on a further 7,500 kilograms of dried flower. As a result of the news, CannTrust saw its stock on the TSX drop more than 20 per cent.

The cannabis in question was grown at CannTrust’s greenhouse near Niagara Falls, which has 12 rooms. Five of those rooms received licences to grow cannabis in April 2019, but between October 2018 and March 2019—when CannTrust was still in the process of applying for the licenses—the company started growing cannabis in those rooms early. In addition, CannTrust employees were evidently supplying Health Canada with inaccurate information during the application process.

“There’s a lot of stuff happening behind the scenes with these cannabis companies that we don’t necessarily hear about,” says Rich.

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The cannabis on hold represents a huge percentage of StillCanna’s inventory. In Q3 2018, the company sold roughly 3,000 kgs.This means that nearly 12,500 kgs of cannabis equates to roughly one year’s worth of product. Members of the CannTrust team are currently looking for ways to source product from elsewhere in order to continue supplying customers.

“CannTrust is clearly acknowledging that mistakes were made here,” said chief executive Peter Aceto. “This is a high priority for us to correct these mistakes, particularly with Health Canada. We’ve got a very clear process in place in order to get ourselves back into compliance as quickly as we possibly can.”

Though things look grim for CannTrust, Rich says this news represents a unique buying opportunity for investors.

“I believe CannTrust is a great company that has made mistakes in the past that they’re going to need to clean up,” he says.“I wouldn’t suggest you go out and buy it right away, but at some point CannTrust will hit a bottom and this will be an incredible buying opportunity.”

Please see below for video transcription.

Video Transcript

hey guys how you doing this is rich from
00:01
wish to view live so the big news of the
00:03
day that everybody’s talking about is
00:05
can’t trust you know I’ve said this
00:08
before I’m going to say this again
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there’s a lot of stuff happening behind
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the scenes with these cannabis companies
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that we don’t necessarily hear about
00:15
apparently Health Canada did an
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inspection of can’t trust those
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facilities and they found that they were
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growing in unlicensed crops so they’ve
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got a bunch of crops now that they’re
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not able to sell so they lost like
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thousands of kgs of crops and because of
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that the stock is tanking a lot of
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people are panicking a lot of people are
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you know worried I believe this is
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nothing more than a buying opportunity I
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wouldn’t suggest you going buy it right
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away but at some point can’t trust will
00:50
hit a bottom and it will be an
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incredible buying opportunity this
00:53
reminds me of Organa Grande Organa
00:55
Graham did something similar when they
00:57
had pesticides in their crops and we saw
00:59
the stock go well over you know just
01:02
recently went well over ten bucks and
01:05
when they had issues with pesticides in
01:07
the crops we saw the stock go under two
01:09
dollars at the time I told everybody was
01:11
going to be an incredible buying
01:12
opportunity and it was and we’ve seen
01:15
Organa Graham go up over 500% since
01:18
that big negative news that came out
01:21
that said that they had pesticides in
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their crops and I believe tantras is a
01:26
great company that had some problems in
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the past that they’re gonna have to
01:30
clean up I wouldn’t be surprised to see
01:32
lawsuits coming so I anticipate more
01:35
losses coming for can trust I wouldn’t
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rush to buy it I would want to wait to
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see how the Shorter’s attack this how
01:42
the lawsuits attack this typically when
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you see a stock like this and then the
01:50
stock goes down there will be lawsuits
01:52
coming so stay tuned for that
01:54
I wouldn’t be surprised to see it go
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much lower and creating a creating an
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incredible buying opportunity
02:00
at which point in time I would like to
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personally load up because I believe it
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will go much higher
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I still believe can’t trust has a great
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future I believe will be one of the
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bigger LPS in the world they are going
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to be focused on America as well so
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maybe now we know why because Health
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Canada is really making it difficult for
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a lot of these LPS here in Canada and I
02:23
feel like these LPS are now going to
02:24
start moving into America and
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internationally more and more now so
02:28
stay tuned this is rich from wish to be
02:30
live if you want the news you can go to
02:32
WWE TV live.com get all the breaking
02:35
news trending information at your
02:37
fingertips we’d like to bring you the
02:39
news and we bring it to you first
02:41
can’t trust going down Health Canada has
02:44
reviewed some
02:47
growing operations that apparently they
02:49
were growing out of that weren’t
02:51
licensed this is really bad news can
02:53
trust has been falling aggressively
02:54
because of it and this may be just the
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start so stay tuned we’ll keep you
02:58
updated this is your boy rich from wish
03:01
to be live if you’re not winning you’re
03:02
not watching em TLO is up today a USA is
03:05
up today and cush bottle has been up on
03:07
news that they are going to be moving or
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at least has filed an application to
03:12
move to the Nasdaq so I really like cush
03:15
bottles keep it on your watch let’s keep
03:17
it on your radar if you liked the video
03:19
smash the like button share the video
03:20
everywhere I win you win we all win it’s
03:25
your boy rich richer to be live if
03:26
you’re not winning you’re not watching
03:27
it’s true
03:31
peace