(Reuters) - Troubled Canadian pot grower CannTrust Holdings Inc (TRST.TO) said on Tuesday its license to produce and sell cannabis has been suspended by Health Canada, sending its shares down 12.6%.
The company had delayed its second-quarter results last month awaiting a decision from Canada’s health regulator on a large amount of inventory put on hold after discovery of illegal cultivation by the company.
Last month, Health Canada found fault with cannabis production at a second CannTrust Holdings Inc facility, a month after the regulator froze sales of several tonnes of marijuana grown at another one of its Ontario operations.
CannTrust has since fired Peter Aceto as chief executive officer, while Eric Paul resigned as chairman. Up to Monday’s close, the stock has fallen 69% since the findings were first revealed.
The company had also said in July that it was exploring a possible sale.
On Tuesday, CannTrust said its management and board were reviewing the notice with the company’s counsel and other advisers.
CannTrust added Health Canada would reinstate the licenses if the reasons for suspension no longer existed or if the company could show that the suspension was unfounded.
The company’s shares were trading at C$1.74 on the Toronto Stock Exchange.
Reporting by Arundhati Sarkar and Debroop Roy in Bengaluru; Editing by Shounak Dasgupta