Canntrust Holdings Inc (TRST)

[Sam Dan]

Looks like we have to see what HC will do to really know

the future of the company-not a surprise.

The Globe and Mail reports in its Friday edition that the board of Canntrust Holdings ($3.84) has hired Bay Street law firm McCarthy Tetrault and appointed sporting goods executive Robert Marcovitch to lead a special committee that is probing how the company illegally grew 12,700 kilograms of weed in unlicensed facilities, and who knew about it. The Globe's Mark Rendell and Andrew Willis write that Health Canada inspector are auditing Canntrust after discovering it grew weed in five unlicensed rooms over a five-month period in its greenhouse in Pelham, Ont. Sanctions could range from penalties for management to the cancellation of the company's cannabis production licences, which would effectively shut down the business. CannTrust's stock price has dropped about 40 per cent since it disclosed the regulatory issues on July 8. The special committee is also expected to hire an investment bank to advise it on how to proceed. Early rumours said the company was looking for a buyer. However, an unnamed source said there is little chance Canntrust would sell major assets until it is clearer what penalties Health Canada will impose. Potential deals or management overhauls will depend largely on the special committee.