CannTrust advances its compliance plan
The cannabis producer CannTrust Holdings plans to destroy 65 million worth of herbs in order to obtain regulatory approval in Canada.
The company lost its 17 cannabis sales and production licenses in September after Health Canada found several CannTrust facilities that failed to comply with cannabis growth regulations. The destruction process "will release a much needed capacity" to store the cannabis produced and will complete its plans to return to compliant operations, the company said. in a press release .
CannTrust will also destroy "biological assets", such as plants, valued at approximately 12 million dollars. Inventories destined to be destroyed include products returned by distributors, patients and retailers.
"Our goal is to meet and exceed Health Canada's regulatory standard and restore the confidence of our leading regulator, investors, patients and clients," said Acting CEO Robert Marcovitch.
Since this news, CannTrust shares have jumped by 25%.
The company sacked CEO Peter Aceto in July and forced president Eric Paul to resign as part of an investigation into illegal farming practices.
Health Canada found that the company was growing cannabis in unlicensed rooms in early July and found five rooms illegally converted into product storage areas in mid-August.
CannTrust shares traded at 1,06 $ on Monday, down about 78% since the beginning of the year. According to Bloomberg data, the company has a "buy" score, a "withholding" rating and a "sell" rating from analysts, as well as a 1,51 $ agreed price target.