During the past trading week (July 8 to 12), investors have faced the fallout from a Canadian cannabis producer mistake in growing unlicensed product.
New listing applications from a cannabis accessory company made headlines, while also new developments on the upcoming cannabis infused beverages market caught attention.
Here’s a closer look at some of the biggest news during last week’s trading period.
CannTrust faces ire of investors disappointed in Health Canada ruling
Shares of the Canadian cannabis producer CannTrust Holdings (NYSE:CTST,TSX:TRST) have taken a significant hit during the past trading week. This came following the stunning reveal the producer had grown marijuana in rooms not yet licensed by Health Canada, the regulatory body overseeing cannabis production.
“The decision to grow in the unlicensed rooms were an error in judgement and we take full accountability,” a CannTrust representative told the Investing News Network (INN) in an email statement. “We are preparing a full report to the regulator, including a root cause analysis and mitigating factors.”
Since the original announcement on Monday (July 8), shares of the firm on the New York Stock Exchange (NYSE) dropped over 30 percent as of 1:00 p.m. EDT on Friday (July 12). Meanwhile the value of its shares on the Toronto Stock Exchange also declined to nearly 30 percent over the past five trading days.
Besides the initial non-compliance notice from Health Canada, now a former CannTrust employee has been revealed as a whistleblower for the company’s unlicensed operations. In addition to that, provincial and European partners of the company have confirmed shipments and potential sales of unregulated product sourced from CannTrust.
On Thursday (July 11), CannTrust halted all sales of cannabis products, including medical items to its patient base of over 72,000.
The firm has until July 17 to issue an update to Health Canada; after that, the regulatory agency will operate and determine a proper sanction.
“Listing on the NASDAQ Global Select Market… will raise the company’s profile by diversifying our shareholder base and enhancing share liquidity in support of our company’s long-term goals and objectives,” said Nick Kovacevich, chairman and CEO of KushCo.
KushCo’s CFO Jason Vegotsky previously told INN the company had made a priority to secure its senior US listing.
If approved, this would represent a significant step of maturity for the marijuana space in the public markets, as Canadian producers have secured listings on the NASDAQ or the NYSE already.
Multi-state operator Columbia Care (NEO:CCHW,OTC Pink:COLXF) unveiled its plans to open 20 marijuana dispensaries in Florida before the end of year, while also starting construction on a new 4,000 square foot facility
“Since acquiring our Florida license in 2018, Columbia Care has been quietly assembling its portfolio of dispensaries and building the requisite infrastructure to support the pace of growth that has made the State such a strategic market,” Columbia Care CEO Nicholas Vita said in a press release.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
The post Cannabis Weekly Round-Up: CannTrust Investors Face Red Week appeared first on Investing News Network.