CannTrust’s regulatory breach seen damaging trust in the legal pot market

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CannTrust’s sales halt is only going to exacerbate the already chronic problem of product shortages and high prices in the legal market

Investors made it clear last week that they no longer trust CannTrust Holdings Inc. The company’s regulatory breach may further erode consumers’ trust in the legal cannabis market as well.

CannTrust’s sales halt is only going to exacerbate the already chronic problem of product shortages and high prices in Canada’s legal pot market. According to Cowen & Co. analyst Vivien Azer, 52 per cent of pot products are currently out of stock in Canada’s largest provinces, up slightly from June. CannTrust had the fourth-highest amount of product in the market after Canopy Growth Corp., Aphria Inc. and Aurora Cannabis Inc., meaning the shortages are likely to get worse before they get better.

The breach may have been related to a significant amount of turnover at CannTrust around the time the problem began last October, said Charles Taerk, CEO of Faircourt Asset Management, which held a small position in the company until last Tuesday.

 

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