After speculation following one of the biggest scandals in the nascent Canadian marijuana industry, Ontario-based cannabis producer CannTrust Holdings confirmed its licenses were suspended on Tuesday .
CannTrust informed its investors the company received a notice from federal regulators for the suspension of its license earlier on Tuesday, all for its violations of the Cannabis Act. The company was originally found to have started unlicensed growing at its Pelham, Ontario, facility.
Shares of the cannabis firm in Toronto tanked by double digits after being halted by regulators at 11:32 a.m. EDT. As of 3:59 p.m. EDT, the company was valued at C$1.70 per share, representing a nearly 15 percent drop for the day.
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“The notice states that Health Canada has suspended CannTrust’s authority to produce cannabis, other than cultivating and harvesting, and to sell cannabis,” the firm said in a statement.
On Wednesday’s (September 18) trading session, CannTrust bounced back in Toronto, closing the day with a 1.18 percent recovery for a price per share of C$1.72.
CannTrust will continue to cultivate and harvest existing cannabis yields and conduct ancillary activities in the market. However, the suspension will partially affect CannTrust’s license for standard cultivation and fully halt the company’s processing, medical sales and cannabis research operations.
The cannabis company told investors its license would be reinstated by Health Canada once it can prove its has fully dealt with the reasons behind the suspension.
Health Canada also suggested measures, including controlling the movement of the drug in and out of CannTrust’s facilities and making sure key personnel within the company are fully aware of the provisions of the Cannabis Act that regulate the company’s operations.
The company said its management was reviewing the notice with company counsel and other advisors.
The troubles for CannTrust started in July when its Pelham, Ontario, was found to be non-compliant by Health Canada after it was discovered cannabis was being grown in rooms that were unlicensed.
From there, the reputation of the company fell further as more information about the scandal was revealed.
Any investor value for the firm was shattered following the initial confirmation of wrongdoing. Since the first announcement from the cannabis company, its Canadian shares plummeted over 60 percent in value.
An investigation by the Globe and Mail found that high-level executives in the company, including former CEO Peter Aceto and former chairman Eric Paul, were aware of the illegal growing operations.
The discovery, and an internal review of the company, lead to Paul’s forced resignation and the firing of Aceto, who was then replaced by Robert Marcovitch as interim CEO.
In the fallout, thousands of kilograms of CannTrust cannabis were put on hold. Ontario and Alberta also pulled the company’s products from shelves, and CannTrust’s Danish partner quarantined its stock.
Ontario later returned C$2.9 million dollars worth of cannabis product from the company, saying these were “non-conforming products” and didn’t comply with its master cannabis supply agreement with CannTrust.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
加拿大大麻行业新出现的最大丑闻之一引发了猜测，总部位于安大略的大麻生产商 CannTrust Holdings 周二证实，其牌照被暂停。
佳能信托告知投资者，该公司周二早些时候收到了联邦监管机构的通知，要求暂停其牌照，所有这些都是因为其违反了《坎纳比斯法案》( Cannabis Act )。该公司最初被发现在其安大略的 Pelham 工厂开始了无许可的增长。
多伦多大麻公司的股价在 EDT 上午11:32被监管机构叫停后下跌了两位数。截至 EDT 下午3:59，该公司股价为每股1.70加元，当日跌幅近15%。
该公司在一份声明中表示：“该通知称，加拿大卫生部已暂停 CannTrust 生产大麻的权力，而不是种植和收获大麻，并出售大麻。”
周三（9月18日）的交易时段， CannTrust 在多伦多反弹，当天收盘时，每股1.72加元的价格回升了1.18%。
CannTrust 将继续培育和收获现有的大麻产量，并在市场上开展辅助活动。然而，暂停将部分影响到 CannTrust 的标准种植许可，并完全停止该公司的加工、医疗销售和大麻研究业务。
加拿大卫生部还建议采取措施，包括控制药物进出 CannTrust 的设施，并确保公司内部关键人员充分了解规范公司运营的 Cannabis 法案的规定。
CannTrust 遇到的麻烦始于7月份，当时加拿大卫生部发现其安大略省的 Pelham 在没有许可证的房间里种植大麻后发现不符合要求。
《环球邮报》( Globe and Mail )的一项调查发现，包括前首席执行官彼得?
这一发现以及对该公司的内部审查，导致保罗被迫辞职，并解雇了宏碁，后者随后被罗伯特•马科维奇( Robert Marcovich )接替，出任临时首席执行官。
结果，成千上万公斤的佳能信托大麻被搁置。安大略和阿尔伯塔省也将该公司的产品从货架上撤下，而 CannTrust 的丹麦合作伙伴对其库存进行了隔离。
安大略省随后从该公司归还了价值290万加元的大麻产品，称这些产品是“不合格产品”，不符合其与 CannTrust 签订的大麻供应主协议。
证券披露：我， DanielleEdwards ，没有在本文提到的任何公司直接投资权益。