Kehoe Law Firm, P.C. is investigating potential securities claims on behalf of shareholders of CannTrust Holdings Inc. (“CannTrust” or the “Company”) (NYSE: CTST) resulting from allegations that CannTrust may have issued materially misleading business information to the investing public.
On July 8, 2019, CannTrust announced its greenhouse facility in Pelham, Ontario, was audited by Health Canada and found to be “non-compliant.” Health Canada has placed a hold on approximately 5,200 kilograms of dried cannabis that was harvested in unlicensed rooms at the Pelham facility, until it deems CannTrust is compliant with regulations. CannTrust also said that it instituted a voluntary hold on approximately 7,500 kilograms of dried cannabis equivalent that also was produced in the unlicensed rooms.
Following this news, CannTrust stock fell sharply during intraday trading on July 8, 2019.
Specifically, CannTrust’s Form 8-K stated that the Company
. . . received a compliance report from Health Canada notifying the Company that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations. CannTrust has accepted Health Canada’s non-compliance finding and has taken actions to ensure current and future compliance.
The non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees. Growing in unlicensed rooms took place from October 2018 to March 2019 during which time CannTrust had pending applications for these rooms with Health Canada. These rooms were constructed in accordance with regulations and Good Production Practices, and licenses were issued for each of the five rooms in April 2019. There are 12 rooms in total at the facility.
Health Canada has placed a hold on inventory which includes approximately 5,200kg of dried cannabis that was harvested in the previously unlicensed rooms in Pelham, until it deems that the Company is compliant with regulations. In addition, CannTrust has instituted a voluntary hold of approximately 7,500kg of dried cannabis equivalent at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms. [Emphasis added.]
If you purchased CannTrust securities and suffered damages, please contact either John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to learn more about the securities investigation.