VAUGHAN, Ont. — CannTrust Holdings Inc. shares slipped Friday after the cannabis company said it is laying off as several as 140 folks — roughly one particular quarter of its workforce — whilst it works to regain its federal licences to sell and make pot.
Its stock fell as low as $1.52 on the Toronto Stock Exchange, down roughly 13 per cent from its earlier close of $1.74, but regained some ground to close at $1.62.
The Vaughan, Ont.-primarily based pot producer stated late Thursday there will be a series of phased layoffs in between late October and the finish of the year. The cuts are anticipated to outcome in month-to-month money savings of about $400,000 and expense up to $800,000 in severance payments if the personnel are not recalled inside 35 weeks.
“This was a challenging selection, but it is crucial that our workforce reflects the present needs of our organization,” stated Robert Marcovitch, CannTrust‘s chairman and interim chief executive officer, in a statement.
“Reducing the company’s present operating expenditures supports our economic sustainability and locations us in the finest position to totally resume production upon the reinstatement of our licenses. We appear forward to rehiring at that time.”
The savings from the temporary layoffs will rely on when it regains licenses from Wellness Canada, CannTrust stated.
CannTrust has been mired in turmoil because it disclosed in July that Wellness Canada had found illicit cultivation in unlicensed rooms at its Pelham, Ont., greenhouse.
The firm later terminated its CEO “with cause” and asked its chairman to resign immediately after the board discovered new data through an internal investigation. Wellness Canada suspended CannTrust’s licenses to make and sell cannabis in September.
In September, CannTrust announced it was laying off about 180 folks, which at the time amounted to roughly 20 per cent of the company’s workforce.
The firm stated it submitted a detailed remediation program to Wellness Canada on Oct. 21. It expects to total the operate described in the program by the finish of the 1st quarter of 2020.
CannTrust’s remediation plan contains an expanded internal coaching system, a strengthened governance and operations framework and infrastructure enhancements. It also contains its previously announced program to destroy $77-million worth of plants and inventory that was not authorized beneath its licence.
“CannTrust is confident that its remediation program addresses all of the compliance problems identified by Wellness Canada,” stated Marcovitch.
CannTrust also said that a specific committee has completed its investigation into the causes of its non-compliance with the Wellness Canada regulations and created its report to the board of directors.
The firm stated its probe involved a complete independent overview of CannTrust’s e mail and other documents, as effectively as interviews with present and former personnel, particular members of senior management and all members of the present board of directors.
“Importantly, the specific committee’s investigation identified no proof that any of the remaining members of the board have been conscious of or engaged in any non-compliance problems,” stated Mark Dawber, chair of the specific committee, in a statement.
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