Shares in Canadian cannabis company CannTrust plunged by more than 25 per cent before markets opened on Monday after the company said Health Canada has deemed a second one of its facilities “non-compliant with certain regulations.”
The Vaughan, Ont.-based company’s problems began about a month ago after government health authorities discovered it had been producing cannabis plants in unlicensed greenhouses.
Health Canada halted the sale of products from the company’s facility in Pelham, Ont., near Niagara Falls, last month after it was revealed that the company was growing cannabis in five greenhouses within the 12-greenhouse facility that didn’t have a license to operate at the time.
Now a second facility, in Vaughan, north of Toronto, has also been found in violation of regulations.
A news release from the company said Health Canada flagged the company for, among other things, inadequate security protocols, failing to retain documents, inadequate quality assurance and improper cannabis storage procedures.
Those revelations came about following an inspection by officials from Health Canada of the Vaughan facility in early July.
CannTrust has already fired its CEO and board chair as a result of the first illegal growing scandal.
Before recent events, CannTrust shares were worth about $13 apiece on the TSX. But they lost 27 per cent of their value in premarket trading on Monday, going as low as $2.45 a share.
More to come