CTST stock fell over 5% in early session on Monday after CannTrust Holdings (TSX:TRST) (NYSE:CTST) said that the Ontario government's cannabis retailer has decided to return all of the company’s products.
More Bad News
The troubles don’t seem to be ending for beleaguered Canadian cannabis operator CannTrust. In a development that is almost certainly a blow to the company’s hopes of hanging in, the cannabis wholesaler in the province of Ontario has decided to return its products. The company made the announcement today. The wholesaler in question is the government-controlled Ontario Cannabis Store, which has indicated that it is going to return all or nearly all of the products that it has bought from CannTrust Holdings.
The wholesaler has stated that it is going to return the products since they are non-conforming. The products in question are valued at $2.9 million CAD. In this regard, it is necessary to note that Canada’s cannabis regulator Health Canada did not recommend the return of the company’s products, which CannTrust mentioned in the statement this morning.
At the time of writing, CTST stock is down 4% at $2.02. On the Canadian side, CannTrust stock is down 3.50% at $2.69.
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Tough Period
Over the course of the past month, CannTrust Holdings has been in complete turmoil after Health Canada found out that the company had been cultivating cannabis in five unlicensed rooms at its Pelham facility.
Right after the discovery, the company withheld as much as 7,500 kilos of cannabis at its Pelham location, while 5,200 kilos were withheld at the Vaughan facility. Since then, CannTrust has lurched from one trouble to the next as CTST stock price crashed by as much as 50% during the course of July.
The company has been cooperating with the authorities, but another blow soon came to CannTrust after it emerged that its executives had been aware of the whole thing. The Chief Executive Officer was fired, and the President had to step down. At this point in time, the company is exploring the option of ceasing all sales until it comes to know the reprimand that it is going to get from Health Canada. It is interesting to note that CannTrust has also employed the services Greenhill & Co to see if a sale could be brokered.
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