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.
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.”
Things just never seem to get better for CannTrust Holdings Inc. (TSX:TRST) (NYSE:CTST). The most dramatic downfall in the cannabis space just keeps delivering gut punches, as today the company announced that it received late a ... [Read]
Cannabis stocks have been seeing hints of the resurrection ever since August ended. Unfortunately for CannTrust Holdings (TSX:TRST) (NYSE:CTST), however, the summer slump might never end. After months of bad press, falling stock prices, and ... [Read]
It’s been a whirlwind couple of weeks for CannTrust Holdings (TSX:TRST) (NYSE:CTST). What started with a hold on 5,200 kgs of cannabis from Health Canada has now seemingly culminated in CEO Peter Aceto and chairman of the ... [Read]
All week, Rich has been dissecting the CannTrust licensing scandal. For anyone who’s unaware, CannTrust Holdings (TSX:TRST) (NYSE:CTST) was caught by Health Canada growing cannabis in unlicensed rooms at the company’s facility near Niagara Falls. The ... [Read]
It’s been a week since news broke that CannTrust Holdings (TSX:TRST) (NYSE:CTST) was busted by Health Canada for growing cannabis in unlicensed rooms in its Ontario greenhouse. The news resulted in more than 12,500 kgs of ... [Read]
Nowadays investors are increasingly flocking to the internet in order to get the latest information in relation to the latest stocks and the related companies. There are numerous sources to get hold of such information ... [Read]
In recent months, RichTV Live has emerged as one of the most important YouTube channels for investors and for good reason, considering the sort of content that it releases regularly. The videos published by the ... [Read]