REUTERS/Amir Cohen
- Canadian cannabis producer CannTrust Holdings spiked as much as 23% on Friday after ousting its CEO and forcing its president to resign amid an investigation into its unlicensed pot greenrooms.
- Health Canada found the company non-compliant in early July for growing pot in unapproved rooms hidden behind false walls.
- CannTrust told customers and patients they will experience temporary shortages in product as it explores other production options.
- Watch CannTrust trade live here.
Shares of CannTrust Holdings spiked as much as 23% on Friday after the company fired its CEO and forced its president to resign amid an investigation into its unlicensed pot-growth rooms.
Health Canada found the cannabis producer non-compliant in early July for growing pot in unlicensed greenhouses hidden behind false walls. The regulator also found CannTrust employees had given it inaccurate information.
CannTrust’s board of directors appointed Robert Marcovitch as interim CEO. The cannabis producer will fully cooperate with Health Canada to resolve its unlawful actions, the company said in a Thursday press release.
"Our first priority is to complete the remaining items of our investigation and bring the Company’s operations into full regulatory compliance," Marcovitch said in a statement. "Implementing the necessary changes is essential to the interests of our medical patients, customers, shareholders and employees,"
Health Canada placed a hold on about 5,200 kilograms of the illegally-produced cannabis, and a voluntary hold on another 7,500 kilos of product, after the July discovery. Some customers and patients will see temporary product shorages as the company seeks a new way to boost inventory, CannTrust announced in a press release following the hold.
CannTrust shares traded down as much as 22% on the news, the Canadian company’s biggest intraday drop on record. The company is down roughly 50% year-to-date as of 10:10 a.m. ET.
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Source: Business Insider – feedback@businessinsider.com (Ben Winck)