Class action suit filed against CannTrust Holdings

Pennsylvania based firm, RM LAW, P.C. announced Monday the filing of a class action lawsuit against CannTrust Holdings Inc. (NYSE: CTST)

The suit, filed on behalf of purchasers of CannTrust Holdings Inc. securities between November 14, 2018 and July 5, 2019, alleges that CannTrust issued a series of false and misleading statements to investors.

The suit also alleges that the CannTrust was growing cannabis in its Pelham greenhouse while applications for regulatory approval were still pending; that the Pelham location was non compliant, and that, as a result, CannTrust was reasonably likely to face an inventory hold by Health Canada.

On July 8, 2019, CannTrust disclosed that Health Canada found that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations.

As a result, Health Canada placed a hold on 5,200 kilograms of dried cannabis harvested from the unlicensed rooms, along with an additional 7,500 kilograms voluntarily held by the Company, until the facility becomes compliant. 

Following this news, shares of CannTrust Holdings stock fell $1.11 per share, or over 22% in value, to close on July 8, 2019 at $3.83 per share.