CannTrust shares dive on report that execs knew of unlicensed pot growing

CannTrust Holdings Corp. shares have plummeted further after a media report alleging that the cannabis company’s chief executive and chairman of the board were aware of pot cultivation in rooms without government approval months before Health Canada discovered the illicit activity.

Shares of the Vaughan, Ont.-based licensed producer were down more than 20 per cent in early afternoon trading on the Toronto Stock Exchange to $2.70 from its previous close of $3.43.

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A report published in the Globe and Mail late Tuesday cites emails that suggest CannTrust chairman Eric Paul and its chief executive Peter Aceto were informed in November that the firm was growing pot in unlicensed rooms at its Ontario greenhouse.

CannTrust is being investigated by Health Canada, which says it discovered during an unannounced inspection in June that the pot firm was growing cannabis in several rooms before it got the appropriate licences to do so.

CannTrust disclosed Health Canada’s findings on July 8, and nearly 13,000 kilograms of cannabis products linked to the five unlicensed rooms have been put on hold by both the regulator and voluntarily by CannTrust as samples undergo testing at government laboratories.

CannTrust voluntarily halted all shipments and sales of its products as Health Canada conducts its investigation and an independent special committee of its board of directors examines what transpired.

WATCH: CannTrust marijuana producer on pot shortages, cannabis legalization and product innovation

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