GMP said Friday it is placing its rating, price target and forecasts for CannTrust Holdings Inc.
under review, following the scandal involving unlicensed growing at rooms at the company’s Pelham facility that has shaved more than 40% off the stock’s value this week. CannTrust shares were down another 13% in premarket trade after the company said late Thursday it is ceasing sales and shipments of all cannabis products. Health Canada, the regulator, has seized more than five metric tons of the company’s cannabis over the issue. Adding to the downdraft, CannTrust’s Danish partner said it has received some of the illegal weed and has quarantined it. The Globe and Mail reported that the company had built fake walls to conceal the illegal grow from regulators, citing a named former employee. GMP analyst Ryan Macdonell said the company’s inability to offer details on potential wrongdoing or the possible financial impact was adding to the uncertainty. “At this stage the range of potential outcomes appears wide. Hence, until we have more visibility on the potential outcome of the investigation and its impacts to the company, we will put our rating, target and forecasts Under Review,” said Macdonell. Shares have fallen 36% in 2019, while the S&P 500
has gained 20%.
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