CannTrust Holdings Inc CTST TRST shares plummeted on Tuesday afternoon after the company was notified that Canadian health authorities are suspending its license to produce and sell cannabis in Canada.
Canadian investigators alleged this past summer that the Ontario-based company was producing thousands of kilograms of cannabis in unlicensed grow rooms.
Regulators could have revoked the company’s license entirely. CannTrust said in a statement Tuesday it was notified that the suspension is a partial one, preventing it from selling the drug, but allowing it to continue to cultivate and harvest existing lots.
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During the suspension, CannTrust can’t propagate new lots or batches of cannabis or engage in the sale or distribution of cannabis, the company said. CannTrust, which also trades on the Toronto Stock Exchange, made leadership changes after the charges were announced in July.
CannTrust didn't disclose how long the suspension might last, saying only that Health Canada notified the company it would reinstate its license if the reasons for the suspension are shown to no longer exist.
Shares of CannTrust were down 14.4% Tuesday afternoon, trading at $1.28.
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