CannTrust advances its compliance plan
The cannabis producer CannTrust Holdings is considering destroying stocks of herbs valued at $ 65 million in an attempt to gain regulatory approval in Canada.
The company lost its licenses to sell and produce cannabis on September 17, after Health Canada found several CannTrust facilities not complying with cannabis growth regulations. The destruction process "will free up much needed capacity" to store the cannabis produced and complement its plans to return to compliant operations, the company said. in a press release .
CannTrust will also destroy "biological assets", such as plants, worth approximately $ 12 million. Inventory for destruction includes 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 Acting CEO Robert Marcovitch.
Since this news, CannTrust shares have jumped by 25%.
The company sacked CEO Peter Aceto in July and forced chairman Eric Paul to resign, as part of an investigation into illegal cultivation practices.
Health Canada discovered that the company was growing cannabis in unlicensed chambers in early July and found five chambers illegally converted to product storage areas in mid-August.
CannTrust shares traded at $ 1,06 on Monday, down about 78% year-to-date. According to Bloomberg data, the company has a “buy” rating, a “hold” rating and a “sell” rating by analysts, as well as an agreed price target of $ 1,51.