Can'tTrust (TRST-T) is under investigation by Health Canada, after federal regulators found the cannabis producer grew 12,700 kilograms of cannabis in unlicensed rooms between October, 2018, and March, 2019.
The value of Canntrust shares has fallen 47 per cent since July 8, when the company acknowledged that it had received a noncompliance order from Health Canada, raising concerns that Canntrust could lose its licence or be forced to destroy thousands of kilograms of cannabis worth tens of millions of dollars.
Canntrust halted all sales on July 11, pending the outcome of the Health Canada investigation. Health Canada has not indicated how it intends to respond to the regulatory breaches at Canntrust. It has the power to suspend and revoke cannabis licences, and to issue fines.
Prior to revelations of unlicensed growing, Canntrust was widely regarded as one of the best operators in the cannabis space. The scandal has cast the cannabis industry in an unfavourable light as it seeks to attract capital and expand operations in the United States, where federal legalization has yet to move forward. |
