CannTrust Announces Court Approval for C$22 5 Million Debtor-in-Possession and CCAA Exit Credit Facility Financing

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CannTrust Announces Court Approval for C$22 5 Million Debtor-in-Possession and CCAA Exit Credit Facility Financing

Our greenhouse produces Grade A cannabis flower, with products currently being sold in dried flower, pre-roll, vape, oil drops and capsule formats. Founded in 2013, our continued success in the medical cannabis market and subsequent expansion into the recreational business, led to us being named Licensed Producer of the Year at the Canadian Cannabis Awards 2018. Our greenhouse produces Grade A cannabis flower, which is currently sold in dried flower, oil drops and capsule formats. While we’ve witnessed plenty of instances where cannabis stocks have lost investor’s trust over the past year and change, nothing has been more egregious than what CannTrust did. In July 2019, the company announced that it had grown marijuana illegally in five unlicensed rooms at its flagship Niagara facility for a period of six months (Oct. 2018 – March 2019). Additional investigations also showed that now-former CEO Peter Aceto knew of this illicit grow operation and did nothing to stop it.

Phoena is committed to providing exceptional consumer experience, quality & consistent products. Phoena’s greenhouse produces Grade A cannabis flower, which is sold in a variety of dried flower and extract formats. The hearing date for court approval of the Proposal will be scheduled after the creditors meeting, if the Proposal is approved by the creditors at the creditors meeting. Details on the hearing date will be posted to the Proposal Trustee’s website once available.

On August 8, 2019, the NYSE flagged CannTrust as deficient for failing to file audited financials in a timely manner. CannTrust last submitted financials to the securities regulators on March 30, 2019. The Company anticipates and expects to file the Q2 Filings and, if required, the Restated Financials, and any other periodic disclosure required to be filed under applicable securities laws as soon as practicable once information relevant to related matters is available. At CannTrust, we are committed to providing an exceptional customer experience, as well as consistent and quality products through standardized processes.

  • Meanwhile CannTrust is selling for just $1.04 per share as of this writing for its U.S. listing, bringing out the supposed bargain hunters.
  • The most critical aspect of CannTrust’s fall was Health Canada’s decision not to reinstate the licenses needed by CannTrust to generate revenue.
  • CannTrust remains under Companies’ Creditors Arrangement Act protection as it deals with multiple class action lawsuits and other litigation.
  • Additional investigations also showed that now-former CEO Peter Aceto knew of this illicit grow operation and did nothing to stop it.
  • CannTrust retains the remaining 10 per cent of the common shares of CannTrust Equity.

The company’s shares surged briefly on Oct. 15 when it announced plans to destroy $77 million worth of cannabis plants and inventory as part of its efforts to comply with Health Canada regulations. CannTrust says it is working with its independent auditor and expects to file the financial statements and related disclosure before the deadline. /PRNewswire/ – CannTrust Holdings Inc. (“CannTrust” or the “Company”) today announced it is returning to the Canadian cannabis marketplace with two of its recreational brands LiivTM and Synr.gTM.

Ashley Keenan is a freelance journalist, consultant, and patient advocate in the cannabis industry. The Canadian cannabis industry was surprised to see the charges laid under the Ontario Security Act instead of the Cannabis Act, which is the governing legislation for cannabis in Canada from seed to sale. Regardless, the current market cap – $150 million – is still too high. Even at just a buck per share, CTST stock has plenty more downside ahead of it. Unless the company tries to liquidate, it’s likely to burn through much of its residual value as it attempts to get operations going again. Given how badly even the best-managed marijuana companies are doing right now, there’s no need to speculate on scandal-plagued CannTrust.

Litwin and Paul are also facing insider trading charges and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus. Securities charges against three former executives — former chief executive Peter Aceto, former vice-chairman Mark Litwin, and former chairman Eric Paul — are set to be reviewed in Ontario court Sept. 20. The beleaguered Ontario-based drinking alcohol on the low fodmap diet cannabis company has yet to unveil its new moniker but plans to convene a meeting of its shareholders within the next four months. VAUGHAN, Ont. – CannTrust Holdings Inc. plans to change its name after exiting creditor protection, with its subsidiary receiving $17 million in financing from a group of investors led by a Netherlands-based private equity investment company.

Those aforementioned supply issues throughout most of Canada haven’t allowed pot stocks to reach anywhere near as many consumers as they’d like. Long story short, none of Canada’s growers have run away from the field in the market share department, providing plenty of opportunity for CannTrust to slide right back in as a major supplier. Remember, this is one of only a small number of growers to have signed supply deals with every province.

Any person wishing to support or oppose the relief sought at the approval hearing may serve court materials on the service list setting out their basis for their support or opposition and/or attend the hearing. After considering the court materials filed by the Proposal Trustee, CTH and any other person, and hearing the submissions of those present at the hearing , the Court may approve the Proposal and other relief sought by CTH. If approved by the Court, CTH would then proceed to implement the Proposal. “Obviously the market has changed and we’ve been out of the market for some time, but we’re going to continue to work hard to educate and inform our customers and patients about our products,” he said. It is also promising its full line of medical products will return in the near future and that it will enter the nearly year-old cannabis 2.0 market that has focused on edibles, vapes and topicals. The Company has established a blackout on trading by directors, officers and other insiders of the Company, and intends to continue the blackout until the Q2 Filings and any Restated Financials, if required, have been filed.

What Can We Learn From CannTrust? A Lot

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. If you enjoyed this, consider Ian’s Insider Corner to enjoy access to initiation reports for all the new stocks that we buy. Membership also includes an active chat room, weekly updates, and my responses to your questions. This should give you a sign that something is amiss, and a clue as to why CTST stock has managed to perform even worse than its other marijuana peers? CannTrust had its Health Canada license suspended after a scandal. The marijuana producers have created far more supply than the market has demanded so far.

The industry hasn’t yet discovered the basic laws of economics. Meanwhile CannTrust is selling for just $1.04 per share as of this writing for its U.S. listing, bringing out the supposed bargain hunters. At just a buck, and after such a huge fall, CTST stock must have a big rebound coming up, right? Don’t let the share price fool you, CannTrust is no bargain even as shares are down 90% from their peak.

is canntrust still in business

Generally; and, the ability of CannTrust to implement its business strategies. The Company intends to file on a copy of the definitive Term Sheet relating to the Credit Facility, redacted to omit certain commercially sensitive information that has been sealed by order of the Court. It indicates a way to close an interaction, or dismiss a notification. I have no business relationship with any company whose stock is mentioned in this article. Data by YChartsEven against that dismal backdrop, however, CannTrust has managed to lead the pack to the downside, with CTST stock down a stunning 89% since the beginning of March at a time when other sector peers are off closer to 50-60%.

Cannabis Producer CannTrust Prepares for Potential Wind-Down

The bankruptcy filing was the end result of a downward spiral that started in July 2019 when regulators found unlicensed grow rooms and that CannTrust provided them with false and misleading information. Within five days, CannTrust’s stock dropped 48% and the company lost over $174 million in market value. Shareholders quickly filed a class-action lawsuit on July 10, 2019 alleging that the company failed to disclose to investors that it was growing cannabis without regulatory approval and that it did not comply with regulatory requirements. Safe harbor laws, and such statements are based upon CannTrust’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. The New York Stock Exchange and the Toronto Stock Exchange stopped trading the security on the morning of March 31, 2020 when the company announced that it filed for bankruptcy protection and looks to be throwing in the towel as a public company. CannTrust may no longer try to fix its public disclosure statements by filing additional reports as required under the Canadian and US securities laws.

is canntrust still in business

From flavour packed dried flower strains to easy-to-explore oil-based products, the portfolio is designed to enhance special occasions. Synr.g is the cannabis brand that elevates your social life and celebrations with those you’re closest to. Whether consumers are looking for a boost in the morning or simply want some help unwinding at the end of the day, Liiv’s portfolio of dried flower and extracts products has been designed to let them live their way. For those who don’t remember, in July 2019 CannTrust abruptly announced, via a newsletter, that it would stop offering medical cannabis to patients. The announcement came nearly 24 hours after medical customers were locked out of the company’s online ordering portal.

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After nearly two years, charges have finally been filed in regards to the CannTrust cultivation misconduct that shocked the industry and broke patients’ hearts. The scandal seemed straight out of a TV show—hidden grow rooms, possible unlicensed shipping overseas, and 12,500 kg of illegally grown weed destroyed. If you were selling a marijuana company with a suspended operating license, a management team that faced numerous resignations in the face of scandal, and large operating losses even when the company was still functioning properly, what would you pay for it?

The final accelerant was the failure to promptly perform an internal investigation and issue restated financials. Without the mea culpa, a company’s credibility is questioned from all sides including shareholders, creditors, vendors, and regulators. Each day that passes erodes the goodwill and reputation that a company built over time. This is evident in that CannTrust is filing for creditor protection even though it still has $145 million in cash.

Even If You Forget About The Scandal, CannTrust Is Still A Struggling Business

The announcement indicates a comeback for CannTrust in the wake of a tumultuous period starting in the summer of 2019 when a former company employee alleged that CannTrust was growing thousands of kilograms of cannabis in unlicensed rooms at its Fenwick ON grow facility. It intends to either apply to the Ontario Securities Commission for an order revoking the OSC’s “failure-to-file” cease-trade order dated April 13, 2020 or take steps to obtain a stock exchange listing for the common shares of CannTrust Equity. On Friday, Feb. 14, prior to the opening bell, CannTrust announced a number of corporate updates, which included its remediation plan. The company announced plans to file documentation on Feb. 14 with Health Canada to reinstate its cultivation and sales licenses at Niagara, with its filing to do the same at the much smaller Vaughan facility expected during the second quarter.

The accused are former chief executive Peter Aceto, former vice-chairman Mark Litwin, and former chairman Eric Paul. Each of the accused are facing charges of fraud, making false or misleading statements to the OCS and the market. Litwin do i have an allergy to alcohol and Paul are also facing insider trading charges, according to the OSC release. The one positive is that CannTrust managed to raise $170 million earlier this year, though much of that appears to have been committed to CAPEX plans.

CannTrust relaunches two brands following illegal cultivation, CCAA filing

There has been an increase in shareholder class actions in the cannabis industry over the last year. The claims against CannTrust are different in that shareholders allege that they had a right to know that the company was cultivating cannabis without a license. CannTrust really has no defense to this allegation since Canada Health agreed that it happened. We are proudly Canadian, operating a portfolio binge drinking alcohol, black tar colored stools, blank stare and bleeding of brands including estora, Liiv and Synr.g, specifically designed to surprise and delight patients and consumers. The current CannTrust leadership team is distancing itself as much as possible from its three former executives and their charges, noting that no charges have been laid against CannTrust, any of its subsidiaries or any of the company’s current directors, officers, or employees.

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Phoena creates cannabis products that meet the diverse needs of patients and consumers, promoting positivity, supporting creativity, and inspiring confidence. So far, CannTrust’s strategy is to focus first on Ontario, Alberta and British Columbia. Once CannTrust has established a consistent supply of cannabis in those provinces, it will expand to other markets and introduce new products in 2021. The cases were filed after Health Canada discovered illicit cultivation at CannTrust’s Pelham, Ont., greenhouse and seized cannabis from unlicensed rooms in the summer of 2019.

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