Health Canada suspends CannTrust’s production license, shares down another 15%

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CannTrust

Today seems to be the final nail in the coffin for CannTrust (NYSE: CTST), a Canadian-cannabis giant that has lost almost 90 percent of its market cap since it came out that the company was illegally growing cannabis.

Now it seems that we are in the endgame for CannTrust as the company announced to the world that Health Canada officially withdrew its production license.

Although their license is now gone, CannTrust will still be permitted to harvest existing lots or batches that were previously propagated, alongside necessary drying and trimming activities. Once this is completed, however, there’s really nothing much else that the company can do at this point. The only way forward to potentially regain this license would be to address several concerns laid out by federal regulators that led to the suspension in the first place.




“Health Canada has suspended CannTrust’s authority to produce cannabis, other than cultivating and harvesting, and to sell cannabis. As such, the Notice constitutes a partial suspension of the Company’s licence for standard cultivation and a full suspension of its licences for standard processing, medical sales, cannabis drugs and research issued under the Cannabis regulations,” read an official statement from CannTrust regarding the Health Canada suspension notice. “While the suspension remains in effect, CannTrust will be permitted to cultivate and harvest existing lots or batches previously propagated, as well as conducting ancillary activities to those lots, including drying, trimming and milling. During the suspension, CannTrust may not propagate new lots or batches of cannabis or engage in the sale or distribution of cannabis.”

The only way things can get worse for the company is if its former executives, such as CEO Peter Aceto and chairman Eric Paul, end up with criminal charges for knowingly selling illegal produce cannabis overseas, something which is a criminal offense under The Cannabis Act.

With really no short-term fix to this solution, the only possible ray of hope could be a potential acquisition from another company. If shares continue to fall, the company could easily see itself trading in a price range that’s worth less then the assets on its balance sheet.

However, its also possible that they would end up selling a large portion of their assets to cover potential fines from the Canadian government. If so, CannTrust could really end up being almost worthless as its shares fall into the penny stock range.

Shares of CannTrust fell by another 14.5 percent on Tuesday in response to the news. Over the past few months since the news first came out about the illegal grow operations, shares of the company have since fallen by 87.4%. Now that we’ve reached this point where the company’s license has been revoked, it seems certain that this company won’t be recovering in any capacity unless it ends up finding a buyer of sorts.

CannTrust Company Profile

CannTrust Holdings Inc is engaged in the business of producing and distributing medical cannabis in Canada. Its facility is located at Vaughan, Ontario in Canada. Its brands include LIIV, ESCAPE, SYNR.G and Peak Leaf. – Warrior Trading News

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