CannTrust advances its compliance plan
The cannabis producer CannTrust Holdings plans to destroy stocks of $ 65 million worth of herbs in order to obtain regulatory approval in Canada.
The company lost its cannabis sales and production licenses on September 17, after Health Canada found several CannTrust facilities that did not comply with cannabis growth regulations. The destruction process will "free up 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 primary regulator, investors, patients and customers," said Interim CEO Robert Marcovitch.
Since this news, CannTrust shares have jumped by 25%.
The company sacked its CEO Peter Aceto in July and forced its 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% from the start of the year. According to Bloomberg data, the company has a “buy” rating, a “hold” rating and a “sell” rating from analysts, as well as a target price of $ 1,51.