In the latest CannTrust (NYSE:CTST) news, the company’s stock is sinking following news that regulators have seized the business’ cannabis.
The company’s stock price was down to a low of nearly two years as the business announced that regulators made the cannabis seizure after discovering that it was growing the product in unlicensed rooms. Health Canada reportedly discovered that the business was growing cannabis in five unlicensed grow rooms at its Pelham, Ontario facility from October to March.
CannTrust still had its applications pending during this period, which is what led to the seizure. “Health Canada has placed a hold on inventory which includes approximately 5,200 kg of dried cannabis that was harvested in the previously unlicensed rooms in Pelham, until it deems that the company is compliant with regulations,” CannTrust said in a statement.
The business placed a voluntary hold on roughly 7,500 kg of dried cannabis equivalent at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms, per the statement. In the company’s latest quarterly results that were released back in May, CannTrust had revealed that it had produced 9,400 kg of cannabis, selling more than 3,000 kg of dried cannabis equivalent during those three months.
According to investment and research firm Harvest Moon Research, the decision to seize the cannabis was likely caused by CannTrust’s “overall disregard for Health Canada regulations and its licensing systems.”
CTST stock is plummeting about 21.7% on Monday.