CannTrust stock continues to rebound for the second straight session after CannTrust Holdings (TSX:TRST) (NYSE:CTST) said that it is making "significant progress" on getting its suspended licenses in Canada reinstated.
Relief Rally?
One cannabis company that has found itself in extreme trouble over the past couple of months is Canadian firm CannTrust Holdings. It had its license suspended by Health Canada after it had been found that the company had cultivated cannabis in five unlicensed rooms.
However, in addition to that, it had also been found that the company’s top management had been aware of the whole thing. It has now emerged that the company is willing to destroy $77 million worth of its inventory so that it can regain its regulatory approval from Health Canada. It is, without a doubt, a bold proposition and has caused a flutter in the market as well.
CanTrust Holdings has stated that it is willing to destroy its weed inventory worth $65 million, and in addition to that, it is also prepared to destroy an extra $12 million worth of biological assets.
>> Aphria Stock Soars 24% as Investors Cheer Surprise Q1 Profit
At the time of writing, CannTrust stock is up 20% at $1.25 on the NYSE, extending yesterday's rally of 17%.
The inventory that is going to be destroyed by the company includes products that had been returned by retail outlets, customers, and distributors.
The interim Chief Executive Officer of CannTrust, Robert Marcovitch, spoke about the situation: "Our goal is to meet and exceed Health Canada's regulatory standard, and to rebuild the trust and confidence of our primary regulator, investors, patients, and customers."
Both the previous Chief Executive Officer and the President of the company had to resign after it was found that both were aware of the illegal cultivation. However, the development is a clear indication that CannTrust is trying everything to regain its license that it had been awarded in April earlier this year.
In 2019 so far, CannTrust stock has lost as much as 76%, and it remains to be seen what happens over the next weeks.
Will CannTrust Holdings be able to regain your trust?
Featured image: Canva
