CannTrust Holdings Inc (NYSE:CTST) released a status update on Thursday in line with the requirement for a Management Cease Trade Orders (“NP 12-203”) as per the National Policy 12-203.
The MCTO makes it compulsory for the firm to release updates twice every week until it is up to date with its filing obligations requirements of the Canadian securities laws. The Ontario Securities Commission issued the MCTO which also prohibits CannTrust’s executive officers and directors from acquiring the company’s securities or trading them.
This prohibition will remain active and will only be lifted two business days after CannTrust files an interim financial report for the quarterly and half-year period ended June 30, 2019. The company’s investors who are not insiders will not be affected by the MCTO. CannTrust has also expressed its commitment to comply with the NP 12-203 guidelines.
Will the company get delisted from the New York Stock Exchange?
CannTrust might be at risk of delisting by the New York Stock Exchange due to its illegal growing activities. The Canadian firm targeted the U.S due to the huge market potential at a time when cannabis was gaining legal status. There were a lot of positive expectations about the company but things have been going downhill ever since it announced that it had been illegally growing cannabis in 5 unlicensed rooms for five months.
The confession came after a review by Health Canada, a Canadian regulatory authority. The company had been conducting the illegal growth at the unlicensed rooms from October 2018 to March 2019. It was awarded a license for the rooms in April this year but the impact of the illegal growth started haunting the company. Health Canada placed 5,000 kilos of the company’s product on hold, and so it could not sell its products while investigations were being conducted.
The situation led to distrust especially by investors and CannTrust stock has been on the decline. The NYSE requires firms to maintain a $1 minimum share price to avoid delisting. CannTrust’s stock closed Friday’s trading session at $1.20 and if it goes below the $1 mark, then it might end up being delisted.