CannTrust stock is sinking yet again on Thursday after the Toronto Stock Exchange said it was reviewing the company's listing eligibility because of its failure to disclose financial statements dating back to 2018.
CannTrust Woes Continue
CannTrust Holdings (TSX:TRST) (NYSE:CTST) has been in the spotlight since it disclosed in July that Health Canada had discovered cannabis growing in unlicensed cultivation rooms at its Pelham, Ontario facility. As a result, the company must restate its financial results from 2018 and Q1 2019, and is yet to publish its interim financial statements for the second and third quarters of 2019, along with the corresponding management discussion and analysis. CannTrust stock is down over 8% in Toronto today.
In a press release, the Vaughan, Ontario-based company said it was in “arrears for satisfying certain disclosure requirements.” CannTrust’s statement continued to say that “the TSX has advised that, if the Company is unable to cure those defaults by March 25, 2020, the Company’s securities will be delisted 30 days following such date.” The TSX has declined to speak on the situation, saying the exchange does not comment on individual cases. CannTrust shares are currently trading at $1.01 in Toronto.
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CannTrust Shares Also Threatened in New York
In addition to the potential delisting on the premier Canadian exchange, the ongoing struggles could impact its visibility on the New York Stock Exchange. The world's largest exchange stipulates that companies cannot trade under the $1 mark for longer than 30 consecutive days or face delisting. CannTrust stock is currently trading for around $0.82 in New York and last traded over the dollar mark on November 12.
CannTrust Holdings says it is working with its independent auditor and expects to file the financial statements and related disclosure before the March deadline. However, there appears to be irreparable damage done to the value of CannTrust stock, which has dropped 92% since a March peak of $13.45. With the pot market gearing up for Cannabis 2.0 as a catalyst for serious growth in the new year, CannTrust looks like it will remain under pressure going into January as the dark cloud of those earnings continues to linger over the company.
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