CannTrust Slides After Auditor Withdraws Pot Firm’s Earnings
CannTrust Slides After Auditor Withdraws Reports on Pot Company
(Bloomberg) -- CannTrust Holdings Inc. shares fell as much as 5.7% Friday after its auditor withdrew its reports on the Canadian cannabis company’s year-end and first-quarter results.
The move by KPMG LLP came after CannTrust said last week that it may have to restate its results for the periods ended Dec. 31 and March 31. The company also said it will likely miss the filing deadline for its second-quarter results after regulators found it grew pot in unlicensed parts of its Pelham, Ontario greenhouse.
The company’s stock has fallen 56% since the regulatory breach was first disclosed in early July.
CannTrust recently shared with KPMG “newly uncovered information” from an investigation led by a special committee of the board, the Vaughan, Ontario-based company said in a statement Friday. That investigation led to the firing of Chief Executive Officer Peter Aceto and the resignation of Chairman Eric Paul last month.
Health Canada, the government agency responsible for cannabis regulations, is investigating. Penalties for the breach could include suspension or cancellation of CannTrust’s license. The company hired Greenhill & Co. last week to explore potential alternatives, including a sale.
CannTrust said KPMG was not aware of the problems when it issued the reports and had relied on representations made by individuals who are no longer at the company. KPMG will remain the company’s auditor.
To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Jacqueline Thorpe, Jennifer Bissell-Linsk
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