Another bank has placed beleaguered CannTrust Holdings (CannTrust Holdings News, Stock Quote, Chart TSX:TRST) “Under Review”.
This time, it’s GMP Securities, where analyst Ryan Macdonell says there are simply too many unknowns right now. Earlier this week, the Globe and Mail reported that CannTrust Holdings hid thousands of cannabis plants behind temporary walls in order to stage misleading photographs of an unlicensed growing room for Health Canada, which subsequently issued a compliance report, notifying that TRST’s greenhouse in Pelham, Ontario was non-compliant with certain regulations due to what the company itself described as inaccurate information provided to the regulator by its employees.
“CannTrust’s shares have been subject to significant volatility this week following the announcement of the non-compliant status of its Pelham facility as well as media reports alleging potential side-stepping of the rules,” the analyst says. “In light of the ongoing investigation at Health Canada, CannTrust’s management has been unable to disclose any details regarding the potential wrongdoing. The company has also been unable to give any further updates on the potential financial impact of the investigation.”
In a research update to clients today, Macdonell changed his rating on CannTrust from “Hold” to “Under Review” and pulled his $6.00 one-year price target on the stock.
Earlier this week, the Globe and Mail reported that CannTrust Holdings hid thousands of cannabis plants behind temporary walls in order to stage misleading photographs of an unlicensed growing room for Health Canada, which subsequently issued a compliance report, notifying that TRST’s greenhouse in Pelham, Ontario was non-compliant with certain regulations due to what the company itself described as inaccurate information provided to the regulator by its employees.
“We are uncertain when additional information will be provided by the company, and at this stage the range of potential outcomes appears wide,” Macdonell adds. “Hence, until we have more visibility on the potential outcome of the investigation and its impacts to the company, we will put our rating, target and forecasts Under Review.
About The Author /
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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