The Ontario Cannabis Store pulled CannTrust products, but did not specify which ones. The Alberta Gaming and Liquor Corporation followed suit, placing some products on hold pending the results of Health Canada’s investigation. Bloomberg, National Post
- On Thursday, CannTrust suspended all patient sales before temporarily and voluntarily suspending all sales of cannabis products. Eight Capital analyst Graeme Kreindler said the hold will last until the end of July at least.
Twitter—Harrison Jordan, Globe and Mail, Bloomberg
- Numerous analysts believe CannTrust could lose its production license.
- The company announced the establishment of a Special Committee of the Board of Directors consisting of independent members of the company board.
- CannTrust CEO Aceto admitted some of the illicitly produced product has been shipped to provinces across the country, though he would not say where the product was shipped.
- Danish MED company Stenocare A/S reported receiving three of the batches of illicit product from CannTrust. Under the Cannabis Act, exporting unlicensed cannabis is an indictable offence punishable by prison time.
The Globe‘s Mark Rendell noted that in a sector with some questionable players, CannTrust was understood as a professional operation, helmed by Aceto, who helped transform the cannabis sector when he joined CannTrust from his former position at Tangerine Bank.
Globe and Mail
- The company has partnerships with Breakthru Beverage Group and Apotex, Canada’s largest generic drug producer, and is listed on the New York Stock Exchange.
- Further partnerships may not be forthcoming, warned Jefferies analyst Ryan Tomkins. He said, “This [scandal will] make them less appealing for possible [fast-moving consumer goods] partners. […]This will make institutional investors think twice.”
- Aceto said CannTrust fired one employee over the unlicensed growing and would conduct a third-party “root-cause analysis.”
- “Mistakes were absolutely made at CannTrust,” Aceto said. “We have got a very clear process in place that is going to get us back into compliance as soon as possible.
- The National Bank of Canada’s VP of ETFs and financial products research warned investors that within a couple of years, cannabis will no longer be a trendy investment and cannabis ETFs will face a “day of reckoning.”
- When Health Canada overhauled its application process in May, existing applicants in the system were supposed to have been subject to “high level review,” which the agency estimated would be finished in June. To date, 75% of the reviews (450 of 580 applications) have been done, but insiders said it won’t likely be finished until next year.
MJ Biz Daily
- The Prince Edward Cannabis Management Corporation ended the first six months of legal REC sales with a $483,000 loss, which was canceled out by the province’s $546,000 share of excise taxes.