Shares of CannTrust Holdings Inc (TSX:TRST) continued their perilous nose-dive on Thursday, shedding another 4% in early afternoon trading to hit $2.56 per share. The continuing drop brings the one-week change to -33.33%, and the one-month change to -60.04%.
The Canadian cannabis grower has been caught up in a dizzying decline since a regulatory issue became public on July 8. Now, the latest development in the saga has observers openly speculating on a shake-up of the firm’s top administrators.
The latest development is a media report on July 23 that alleges CannTrust chairman Eric Paul, CEO Peter Aceto and other top-ranking officials were aware of the regulatory breaches involving the growing of thousands of plants in unlicensed spaces at a greenhouse facility in Pelham, Ont., months before Health Canada uncovered them.
In a note to clients, Wall Street analyst Ryan Tomkins said executive changes would be necessary if the company wants to keep its licences.
The analyst with Jefferies International said changes at the top of CannTrust were “both likely and necessary.”
Since the regulatory breaches came to light, CannTrust has put a halt to sales of the company’s brand, has seen exports to Europe put under quarantine, while the company has created a special committee to conduct an internal probe.
Aceta has only been at the helm of CannTrust since last fall, when he replaced the company’s founder Eric Paul.
On July 23, Aceta, a former president and CEO of Tangerine (formerly ING Direct), was expelled from CannaChiefs Media’s Top 50 Most Influential Canna Chief honors. The list helps industry executives elevate their personal brands.
In a statement, the CannaChiefs Media editor Hanni Monk said: "The negligence demonstrated by CannTrust's non-compliance will negatively impact the Canadian legal cannabis market.”