CannTrust stock has been showing an early sign of bottoming out as the stock has gained almost 20% since the beginning of the new year. Let's analyze the key developments from CannTrust Holdings (TSX:TRST) (NYSE:CTST).
One of the biggest events in the cannabis industry was the suspension of Canadian cannabis producer CannTrust’s production licenses by the regulator Health Canada. The company cannot legally produce cannabis in Canada at this point in time, but it is doing everything in its power to regain those licenses.
Key Things to Watch
However, there is some positive news regarding that matter. In October 2019, CannTrust Holdings announced that it is going to complete Health Canada's remediation plan by the time Q1 2020 ends.
The company confirmed last month that it was on track. While the cannabis cultivation license issue is definitely a major issue, there is another equally pressing factor that potential investors need to recognize. After having been pounded over the past few months, CannTrust stock was, for a time, in danger of being delisted from the New York Stock Exchange.
The reason behind the potential delisting was that CannTrust stock had been trading below $1 for most of the past six months, but the company believes that it will be able to provide the NYSE with all the necessary paperwork so that the stock is not delisted—and its current price above $1.00 certainly also helps matters.
If it manages to stay at its current price, then CannTrust stock could well avoid delisting from the NYSE.
It should be noted that CannTrust Holdings still has a significant production capacity, and if it does get back its license, then the stock is expected to react positively. If it can stay listed on the NYSE and TSX and get its license back, then it could prove to be a stock to watch.
Featured image: Canva