Not much trust remains among investors for lawbreaking pot producer
Beleaguered cannabis producer CannTrust appears to be on its last legs according to a Jan. 6 press release from the company itself. While stating that they have contributed some $53 million towards a trust established to facilitate class-action settlements against them, the company conceded that they “have faced challenges,” and, “as a result, the CannTrust Group does not have sufficient liquidity to operate beyond the near term.”
The statement also said the company had accepted the resignations of board chair Robert Marcovitch and three other interim executives.
CannTrust remains in default of its minimum EDITDA (earnings before interest, tax, depreciation and amortization) under its debtor-in-possession loan.
Where this leaves the future of CannTrust’s Fenwick facility is unknown. The Balfour Street site ultimately became the downfall for the company after a disgruntled former employee blew the whistle to media, including the Voice, about unlicensed and illegal cannabis being deliberately grown at the location. A surprise inspection by federal regulators in June 2019 uncovered 5,200 kilograms of unlicensed cannabis at the facility.
A subsequent investigation led to multiple criminal charges being laid against three former executives—former Chairman Eric Paul, former Director Mark Litwin, and former CEO Peter Aceto. Legal proceedings are ongoing. All three men were joined by then-Pelham-Mayor David Augustyn at the Balfour site’s official opening in June 2018. Augustyn, who is not accused of wrongdoing, said at the time that CannTrust’s marijuana operation “provides hope to our community.”