Oct 24 (Reuters) - CannTrust Holdings Inc will temporarily cut its workforce by about a quarter, or roughly 140 people, the company said on Thursday, seeking to recoup losses after Health Canada suspended its license to grow and sell cannabis.
The company expects the cut to save about C$400,000 ($306,091.22) each month, but faces severance costs of up to C$800,000 if the employees are not recalled within 35 weeks, it said in a statement.
The Canadian health regulator canceled CannTrust’s license in September, months after finding it was illegally cultivating pot.
Since the July discovery, the company has fired its chief executive, disclosed a regulatory investigation, and said its results may have to be restated.
The findings of an independent investigation panel were provided to Health Canada and the company’s board, it said in the statement.
The investigation found no evidence that any remaining board members were aware of, or engaged in, any non-compliance issues, the panel chairman, Mark Dawber, said.
Based on the findings, the company is remedying its lack of compliance with measures such as departures from its leadership team, interim Chief Executive Robert Marcovitch said.
The company said it gave a detailed remediation plan to Health Canada on Monday, to restore compliance.
Last week, it said it would destroy about C$12 million ($9.18 million) worth of plants and about C$65 million worth of inventory. ($1=1.3068 Canadian dollars) (Reporting by Manojna Maddipatla in Bengaluru; Editing by Clarence Fernandez)