CannTrust Stock Drops as Director Resigns Amidst Licensing Suspension

CannTrust Stock

CannTrust stock is trading down on Monday after John Kaden, a member of CannTrust Holdings' (TSX:TRST) (NYSE:CTST) board of directors, stepped down from his position as Director as the company remains embroiled in licensing issues.

A Year of Scandal and Controversy

CannTrust Holdings has been perhaps one of the most controversial companies in the pot market during the first year of legalization. News broke in July that the company was growing cannabis in unlicensed rooms between October 2018 and July 2019, with further reports saying that not only did senior officials at the company know about the breach of regulations but that they actually endorsed it. CannTrust stock, along with pot stocks across the board, was sent tumbling as a result.

Following the dismissal of the company's CEO and Chairman, Health Canada released a full list of violations in August, and it did not make for an enjoyable read for investors. The construction of two new areas without prior approval of Health Canada, insufficient security controls and quality assurance, operating procedures that did not meet regulatory requirements, and a lack of adequate bookkeeping were just some of the breaches CannTrust engaged in, according to Health Canada.

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CannTrust stock tanked drastically last month after it was revealed that the company used seeds acquired from the black market to cultivate product that it eventually packaged and sold on the legal market. That breach was the final straw for Health Canada, which suspended the company's cultivation and retail licenses.

CannTrust Stock Trades Near Year-Low

Mr. Kaden had served on the CannTrust board from October 2018, throughout the entirety of this regulatory scandal, and was a part of the special committee that investigated the causes of the company’s non-compliance with Health Canada regulations. He said that he is stepping away from CannTrust Holdings with remediation now well underway, in order to focus on his other role as managing partner and chief investment officer of Navy Capital Green Management LLC, a cannabis investment firm.

CannTrust stock is currently trading at $1.58, down 88% from a March peak of $13.45.

>> Read More CannTrust News

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