CannTrust stock is having the worst week as the fall continues for the fifth straight session after CannTrust Holdings (TSX:TRST) (NYSE:CTST) announced that it has stopped the sale as well as shipment of its marijuana.
Another Big Blow for CannTrust Stock
Earlier this week, it emerged that cannabis retailer CannTrust Holdings had been growing cannabis in five rooms in its facility in Pelham, Ontario in the months prior to getting its license in April this year from Health Canada. The conduct was unearthed by Health Canada and the 5,200 kilos of cannabis produced during the time was sent away for inspection in order to ensure that it met all the regulatory standards.
However, in a shocking development, the company has now voluntarily stopped the sale and shipment of its products, and in the meantime, a special committee at CannTrust is going to investigate the whole affair.
It is a major decision from the company, and it is sure to have an adverse effect on CannTrust stock sooner rather than later. In addition to the Pelham facility, 7,500 kilos of dried cannabis produced at its Vaughan facility had also been voluntarily set aside by the company. Customers who have placed orders can return their products unopened within two weeks, and they will be issued a 100% refund.
CTST stock is down another 10.20% at $2.80 on the NYSE, extending its weekly loss to 45%. On the Canadian side, CannTrust stock slumped 9.50% and is now trading at $3.67.
The company produces a range of products, but it has not specified which particular product it has pulled. However, the effect is not going to be particularly pleasant since CannTrust Holdings currently serves as many as 72,000 patients at this point in time.
It is believed that the products that have been removed from the shelves, both online and offline, are made from the cannabis that is currently being tested by Health Canada.
After this week's slump, CTST stock is down 77% from its 52-week high of $11.97.
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