Article by Kristine Owram, Growth Op
Exactly two years after its debut, CannTrust Holdings Inc.’s stock has fallen beneath its listing price of $2.50.
The pot company has lost nearly two-thirds of its value since early July when it revealed it had broken Canadian regulations by growing cannabis in unlicensed areas of its greenhouse in Pelham, Ontario, potentially putting its license at risk.
The negative headlines have mounted since then. Chief Executive Officer Peter Aceto was fired and Chairman Eric Paul resigned; a joint task force of securities regulators and police is investigating the company for potential “serious violations of the law”; auditor KPMG LLP withdrew its reports on the company’s year-end and first-quarter results; regulators found further breaches at a second facility in Vaughan, Ontario; and Ontario’s cannabis wholesaler is returning $2.9 million worth of products at the company’s expense.
CannTrust has hired Greenhill & Co. to explore potential alternatives including a sale.
The stock fell as low as $2.45 on Wednesday, down 5.8 per cent. If it ends the day at that level, it would be the lowest close since September 2017. Short interest stood at 8 per cent of the public float on Aug. 20, according to IHS Markit data.