CannTrust Holdings Inc (NYSE:CTST) announced on Monday that it has reached a middle ground with Kindred Partners Inc. as part of their ongoing talks.
The company revealed that they reached an agreement through which CannTrust will scrap off the exclusivity provision that is part of its brokerage accord with Kindred Partners Inc. This slight change in the brokerage arrangement is courtesy of the talks between the two firms which have been going on for months. The change will make it possible for CannTrust to lower the costs that it accrues as part of the brokerage deal.
CannTrust sacks its CEO over unlicensed cannabis growing scandal
On some more recent developments, CannTrust relieved Peter Aceto of his position as its Chief Executive Officer due to a brewing scandal in the firm. The company has reportedly been growing cannabis in a hidden greenhouse without a license.
Health Canada is already conducting a deeper investigation into the matter. The Canadian regulator discovered that it had been given false information by CannTrust employees as part of efforts to conceal the illegal undertakings.
The cannabis company’s board of directors has already replaced Aceto with Robert Marcovitch who will act as CannTrust’s interim CEO. The cannabis producer also forced Eric Paul to step down from his position as the company’s chairman after the scandal emerged. The firm also released a statement on Thursday, assuring Health Canada of its commitment towards getting to the bottom of the illegal undertakings.
“Our first priority is to complete the remaining items of our investigation and bring the Company’s operations into full regulatory compliance,” stated Marcovitch.
Health Canada confiscated roughly 5,200 kilograms of cannabis that grown illegally. The scandal will likely cause temporary shortages, and so some of the company’s customers, as well as patients who benefit from its products will likely be affected. However, CannTrust is already working on alternative solutions to boost its inventory.
The news about the scandal that rocked CannTrust this week also negatively affected its stock performance. The stock tanked by roughly 22 percent following the announcement, which means that the stock has now gone down by about 50% on a year-to-date basis.