The CEO and chairman of Canadian cannabis producer CannTrust(CTST) were told the company was growing unlicensed weed months before regulators discovered the violations, according to a report, further submerging CannTrust stock on Wednesday. Other marijuana stocks were mostly down.
A report from the Globe and Mail said that CEO Peter Aceto and Chairman Eric Paul were informed that CannTrust was growing cannabis in unlicensed rooms at a facility in Ontario.
The report was based on internal company emails from November — well before the drama surrounding CannTrust’s compliance problems exploded this month. Those issues have raised questions about whether the company will keep its license.
“We dodged some bullets,” Graham Lee, CannTrust’s director of quality and compliance, wrote in a Nov. 16 email to Aceto and other executives. He sent that email after an inspection of a CannTrust facility in Pelham, Ontario, by Health Canada, the paper said.
Health Canada oversees cannabis licensing in the nation. Lee added in the email that Health Canada “did not ask about RG8E/W, which are unlicensed rooms currently full of plants,” according to the paper. Paul, the paper said, offered guidance on how to address the situation.
CannTrust Stock Dives
CannTrust stock plunged 22% to 2.04 in the stock market today. The stock’s value fell nearly 60% between July 8 and Wednesday.
CannTrust disclosed on July 8 that sale of more than 12,000 kilograms of its weed had been put on hold after regulators found the company grew cannabis in five unlicensed rooms at its Pelham greenhouse facility.
Not long after, the company said it had halted all cannabis sales and shipments as a precaution while regulators inspected a company facility in Vaughan, Ontario.
The Financial Post also reported earlier this month that a former CannTrust employee, who alerted Health Canada of the unlicensed growing in June, said he was asked to hang “white poly walls so that a greenhouse room could appear empty in photos the company submitted to have it licensed for growing.”
The cannabis producer has appointed a “Special Committee” to review the incidents.
Other Marijuana Stocks
CannTrust stock has a dismal Composite Rating of 6. Its EPS Rating, of 29, is better, but still weak. IBD advises investors to consider stocks with Composite Ratings of 90 or higher.
Among other marijuana stocks, Canopy Growth (CGC) dipped 0.3%, Tilray (TLRY) edged up 1 cent. Cronos Group (CRON) rose 0.4%.
Aurora Cannabis (ACB) fell 1.65%. Aphria (APHA) gave up 15%. Hexo (HEXO) tumbled 5.4%.
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Authored By: Investor’s Business DailyArticle category: Marijuana Business NewsRegional Marijuana News: Canada
READ MORE: https://420intel.ca/articles/2019/07/25/pot-stock-canntrust-dives-report-hints-regulators-cant-trust-execs