PHILADELPHIA, July 24, 2019 (GLOBE NEWSWIRE) -- Kehoe Law Firm, P.C. is investigating potential securities claims on behalf of shareholders of CannTrust Holdings Inc. (“CannTrust” or the “Company”) (NYSE: CTST).
A shareholder class action lawsuit has been filed against CannTrust on behalf of purchasers of the Company’s securities between November 14, 2018 and July 5, 2019, inclusive (the “Class Period”).
Investors who purchased CannTrust’s securities during the Class Period have until September 9, 2019 to move the Court to seek appointment as lead plaintiff in the class action.
If you purchased CannTrust securities during the Class Period and suffered losses, please click Join a Securities Class Action to participate in the lawsuit or contact either John Kehoe, Esq., (215) 792-6676, Ext. 801, firstname.lastname@example.org, or Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, email@example.com, firstname.lastname@example.org, to learn more about the lawsuit or the securities investigation.
The class action complaint alleges that CannTrust issued a series of false and misleading statements to investors during the Class Period, and failed to disclose: (i) that CannTrust was growing cannabis in its Pelham greenhouse while applications for regulatory approval were still pending; (ii) that CannTrust’s Pelham greenhouse did not comply with certain regulations; (iii) that, as a result, CannTrust was reasonably likely to face an inventory hold by Health Canada until the Pelham facility becomes compliant with applicable regulations; and (iv) that, as a result, the Company’s customers would face shortages and would likely seek product from CannTrust’s competitors.
On July 8, 2019, CannTrust announced that its greenhouse facility in Pelham, Ontario, was audited by Health Canada and found to be “non-compliant.” Health Canada has placed a hold on approximately 5,200 kilograms of dried cannabis that was harvested in unlicensed rooms at the Pelham facility, until it deems CannTrust is compliant with regulations. CannTrust also said that it instituted a voluntary hold on approximately 7,500 kilograms of dried cannabis equivalent that also was produced in the unlicensed rooms.
Following this news, shares of CannTrust’s stock fell $1.11 per share, or more than 22% in value, to close at $3.83 per share on July 8, 2019.
Specifically, CannTrust announced that it
. . . received a compliance report from Health Canada notifying the Company that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations. CannTrust has accepted Health Canada’s non-compliance finding and has taken actions to ensure current and future compliance.
The non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees. Growing in unlicensed rooms took place from October 2018 to March 2019 during which time CannTrust had pending applications for these rooms with Health Canada. These rooms were constructed in accordance with regulations and Good Production Practices, and licenses were issued for each of the five rooms in April 2019. There are 12 rooms in total at the facility.
Health Canada has placed a hold on inventory which includes approximately 5,200kg of dried cannabis that was harvested in the previously unlicensed rooms in Pelham, until it deems that the Company is compliant with regulations. In addition, CannTrust has instituted a voluntary hold of approximately 7,500kg of dried cannabis equivalent at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms. [Emphasis added.]
Several days later, CannTrust announced that it “. . . implemented a voluntary hold on sale and shipment of all cannabis products as a precaution while Health Canada visits and reviews its Vaughan, Ontario manufacturing facility.”
On this news, the price of CannTrust common stock dropped more than 17% to a close of $2.58 per share on July 12, 2019.
If you purchased CannTrust securities during the Class Period and suffered losses, please click Join a Securities Class Action to participate in the lawsuit or contact either John Kehoe, Esq., (215) 792-6676, Ext. 801, email@example.com, or Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, firstname.lastname@example.org, email@example.com, to learn more about the securities investigation.