CannTrust stock is moving off a recent low today, gaining over 6% as the market bounces back from ‘Black Monday’. Is the troubled pot producer finally on the comeback trail?
The markets were sent into meltdown on Monday as the spread of the coronavirus prompted the worst day of trading since the 2008 financial crisis, leading to further losses in the already worn down cannabis space. CannTrust Holdings (TSX:TRST) (NYSE:CTST), one of the worst-performing pot stocks of 2019, fell 23% yesterday to its lowest-ever value of $0.46, but has recuperated some of those losses today. Is this a sign of better things to come for CannTrust stock or simply a reaction to broader market trends? Let’s take a closer look:
Where Did It All Go Wrong?
CannTrust shares reached a post-legalization peak of $10.06 in late March of last year before things started to sour in the Canadian market over the summer months. The Ontario-based firm had previously been singled out as an industry leader, along with Canopy Growth (TSX:WEED) (NYSE:CGC) and Aurora Cannabis (TSX:ACB) (NYSE:ACB), before the discovery of unlicensed cultivation rooms at is Vaughan facility, which culminated in the dismissal of CEO Peter Aceto and the destruction of C$70 million worth of product, with CannTrust stock almost wiped out in the ensuing months.
CannTrust Stock on the Comeback?
After a tumultuous few months, CannTrust Holdings finally appointed a permanent CEO in Greg Guyatt last month, replacing interim chief Robert Marcovitch, who returns to his position as chairman. While it’s clear that Guyatt faces a mammoth challenge, perhaps even an impossible one, in restoring the firm to its market-leading status, his previous experience suggests he might just be up for the task. Guyatt has spent over two decades in the CPG and pharmaceutical sector, where he oversaw governance, audit, and risk management operations.
Guyatt’s experience and expertise are in the exact areas where CannTrust’s troubles have arisen from, and the company is currently in the process of restating its financial earnings and regaining regulatory compliance. There is clearly still a long way to go for the troubled pot firm, and the current environment isn’t exactly ideal. However, for the first time in a long while, CannTrust stock is moving in the right direction, which suggests some market optimism may be returning to the fallen giant.
What do you think?
Featured Image: Canva