CannTrust Holdings Inc (NYSE:CTST) announced on Monday that it has reached a middle ground with Kindred Partners Inc. as part of their ongoing talks.
The company revealed that they reached an agreement through
which CannTrust will scrap off the exclusivity provision that is part of its
brokerage accord with Kindred Partners Inc. This slight change in the brokerage
arrangement is courtesy of the talks between the two firms which have been
going on for months. The change will make it possible for CannTrust to lower
the costs that it accrues as part of the brokerage deal.
CannTrust sacks its
CEO over unlicensed cannabis growing scandal
On some more recent developments, CannTrust relieved Peter
Aceto of his position as its Chief Executive Officer due to a brewing scandal
in the firm. The company has reportedly been growing cannabis in a hidden
greenhouse without a license.
Health Canada is already conducting a deeper investigation
into the matter. The Canadian regulator discovered that it had been given false
information by CannTrust employees as part of efforts to conceal the illegal
The cannabis company’s board of directors has already
replaced Aceto with Robert Marcovitch who will act as CannTrust’s interim CEO. The cannabis producer also forced Eric Paul to
step down from his position as the company’s chairman after the scandal
emerged. The firm also released a statement on Thursday, assuring Health Canada
of its commitment towards getting to the bottom of the illegal undertakings.
“Our first priority is to complete the remaining items of our investigation and bring the Company’s operations into full regulatory compliance,” stated Marcovitch.
Health Canada confiscated roughly 5,200 kilograms of
cannabis that grown illegally. The scandal will likely cause temporary
shortages, and so some of the company’s customers, as well as patients who
benefit from its products will likely be affected. However, CannTrust is
already working on alternative solutions to boost its inventory.
The news about the scandal that rocked CannTrust this week
also negatively affected its stock performance. The stock tanked by roughly 22
percent following the announcement, which means that the stock has now gone
down by about 50% on a year-to-date basis.
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Published at Thu, 01 Aug 2019 12:04:04 +0000