Scandal-Tainted CannTrust Soars 9.3% After Saying It's Exploring a Possible Sale

Potential alternatives include a sale of the company, a strategic investment or merger, changes to operations or strategy, or simply maintaining the current business plan.
By Rob Daniel ,

Troubled legal-cannabis firm CannTrust Holdings (CTST) - Get Report  soared more than 9% Wednesday after saying it had hired a financial adviser to review strategic alternatives -- including a potential sale -- days after it fired its CEO amid reports that the company had grown pot at an unlicensed facility.

The Ontario-based company's shares rose 9.3% on the New York Stock Exchange to finish at $2.35 after CannTrust said it had retained Greenhill & Co. Canada to advise a board committee that's looking into the situation. Besides a sale, potential alternatives include a strategic investment, a merger, changes to operations or strategy, or simply maintaining the current business plan, CannTrust said in a statement.

The company said it wasn't setting a time frame to complete the strategic review, but said the study's outcome with depend on factors including CannTrust successfully resolving compliance issues with regulator Health Canada. Health Canada cracked down on the company recently for allegedly growing marijuana in unauthorized facilities. 

Earlier this month, CannTrust suspended sales and shipments of cannabis products and appointed a panel to look into the reports of unauthorized growing. The Toronto Globe and Mail newspaper recently reported that company executives knew of the improper cultivation well before regulators intervened.

In addition to firing CEO Peter Aceto, CannTrust on July 26 forced the resignation of Chairman Eric Paul. The company named Robert Markovitch interim CEO. Markovich had been chair of the board committee looking into the matter.

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