Cannabis producer CannTrust to destroy $77M worth of plants, inventory to regain compliance
The company's U.S.-listed shares rose 24% after the announcement was made
Cannabis producer CannTrust Holdings Inc. said on Monday it would destroy about $12 million worth of plants and about $65 million worth of inventory, as the company's new management seeks to regain full regulatory compliance.
The company's U.S.-listed shares rose 24 per cent after the announcement.
Health Canada had frozen over half of CannTrust's stock of marijuana and the company had earlier estimated its inventory and assets impacted by regulatory issues to be about $51 million.
The Canadian health regulator cancelled CannTrust's license to produce and sell cannabis in September, months after it found the company was illegally cultivating pot.
Since the company was found to be growing illegal pot back in July, it has fired its chief executive officer, disclosed a regulatory investigation, and said its results may have to be restated.
The company said on Monday it would not challenge the regulator's suspension order.
The Ontario-based company said its plan to regain regulatory compliance includes measures to recover cannabis that was not authorized by CannTrust's license and improve its inventory tracking.
CannTrust will provide a detailed plan to Health Canada on or before Oct. 21.