CannTrust stock, one of the worst-performing pot stocks in 2019, is showing signs of recovery in recent days after CannTrust Holdings (TSX:TRST) (NYSE:CTST) appointed a new CEO as the embattled firm seeks regulatory reinstatement.
The Ontario-based firm, once viewed as a market leader in the early days of legalization, has been in disarray since the discovery of cannabis growing in unlicensed rooms at its Vaughan facility last July sent shockwaves through the industry. CannTrust subsequently dismissed CEO Peter Aceto as Health Canada moved to strip the firm of all its cultivation licenses and forced it to destroy up to C$70 million of illicit cannabis. The scandal led to a complete collapse in CannTrust stock, which is down over 90% in the last year.
However, it looks like investors may finally have something to cheer about, as CannTrust Holdings sets a path for itself to emerge from the scandal. The company said in a statement last week that it has appointed Greg Guyatt as its CEO, replacing interim chief Robert Marcovitch, who will return to his role as chairman. Guyatt joined CannTrust last February as the company’s Chief Financial Officer and previously served as CFO at GreenSpace Brands, with news of his appointment sending CannTrust stock up around 4%.
CannTrust also announced its intention to submit documents to Health Canada that outline its remediation plans in order to have its retail and cultivation license restored at its Niagra facility, while also expecting the remediation process at its Vaughan site to be completed by Q2 2020. However, the company noted that there is no guarantee that Health Canada will reinstate either facility’s licenses, nor is there a solid timeline either. CannTrust stock is currently trading for $1.11 in Toronto.
Long Way Back for CannTrust Stock?
CannTrust Holdings clearly still has a long way to go if it wants to return to the highs experienced in the early days of legalization; however, as optimism returns to the market and regulators look to address the issues that have stunted growth in the industry, perhaps 2020 could be a brighter year for CannTrust stock and its investors.
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