"The investigation into the company's non-compliance with Health Canada regulations and ancillary matters uncovered new information that has resulted in a determination by the board to terminate with cause CannTrust CEO Peter Aceto. In addition, the board of directors demanded the resignation of the company's Chair Eric Paul and he complied," CannTrust said in a statement.
Earlier this month, CannTrust suspended sales and shipments of all of its cannabis products and said it was appointing a committee of independent directors to investigate problems at the Canadian supplier of medical and recreational cannabis.
Canadian authorities found the company's greenhouse facility in Pelham, Ontario to be "non-compliant." Canadian health regulations placed a hold on 5,200 kilograms of dried cannabis that was harvested from five unlicensed rooms at the location.
The company appointed Robert Marcovitch, chairman of the special committee, as interim CEO. He will step down as a member of the special committee.
"Our first priority is to complete the remaining items of our investigation and bring the company's operations into full regulatory compliance. Implementing the necessary changes is essential to the interests of our medical patients, customers, shareholders and employees," said Marcovitch. "CannTrust has a number of strengths it can draw upon to reset and rebuild, including industry-leading research, innovation and intellectual property."
CannTrust shares jumped 11.28% to $2.17 in premarket trading on Friday.