Shares of CannTrust (CTST) - Get Free Report jumped Monday after the cannabis company announced it would destroy about $12 million of biological assets and another $65 million in inventory that it wasn't authorized to produce.
The move is designed to help the company win regulatory approval that was suspended by Health Canada on Sept 17. The company said at the time that it would not appeal the suspension but would rather work to implement the changes needed to gain approval.
The company said Monday that it will take measures to "ensure that cannabis will be produced and distributed only as authorized ... recover cannabis that was not authorized."
"CannTrust is confident that its detailed remediation plan will not only address all of the compliance issues identified by Health Canada, but it will also build a best-in-class compliance environment for the future," said interim CEO Robert Marcovitch.
CannTrust had its license partly suspended due to issues with unauthorized growing.
In July, the company fired CEO Peter Aceto and let go President Eric Paul amid reports that the two executives knew of illegal pot-growing activities at one of the company's facilities.
The stock was soaring 22% to $1.12 in trading Monday. CannTrust shares had declined earlier in the session before the stock was halted from trading on the New York Stock Exchange.