CannTrust Holdings Inc. (TSX: “TRST”, NYSE: “CTST”, FRA: “C9S”)
Ontario Superior Court of Justice, Court File No: CV-19-1554
Andrew Morganti and Albert Pelletier have become members of Kim Spencer McPhee Barristers, P.C., and the authoritative page for this securities litigation can now be found at our new website.
Morganti & Co., has been contacted by over 100 investors that are furious that CannTrust Holdings Inc. (“CannTrust”) has not taken legal actions against the wrongdoers that destroyed their beloved Company.
On September 18, 2019, Morganti & Co. served a section 246 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”), demand letter on the Company’s Board of Directors (“Board”) to provide them notice that is was our intention to seek leave to bring an action in the name and on behalf of the Company against Peter Aceto (“Aceto”), Eric Paul (“Paul”), their co-conspirators within TRST, and KPMG LLP (“KPMG”).
On July 8, 2019, CannTrust released a statement revealing that Health Canada had determined that one of its production facilities was not in compliance with regulations because the Company was growing cannabis in five unlicensed rooms between October 2018 and March 2019 and because it had provided inaccurate information to Health Canada with regards to its licensing application. This finding resulted in Health Canada placing a hold on 5,200kg of dried cannabis grown in the unlicensed rooms. Additionally, CannTrust announced that it was voluntarily going to place an additional 7,500kg of dried cannabis on hold because it too was grown in unlicensed rooms. On July 11, 2019, CannTrust announced that it was implementing a voluntary hold on the sale and shipment of all of its cannabis products. Additionally, it announced that a Special Committee for the board of directors was created to conduct an internal investigation. On July 24, 2019, it was reported that senior executives of CannTrust were intentionally attempting to deceive Health Canada and that CannTrust was terminating its recently appointed Chief Executive Officer and asking the chair of its board of directors to step down. CannTrust’s share price dropped by over 60% from July 5 – July 25, 2019. On September 17, 2019, CannTrust announced that it received a Notice of License Suspension revoking its authority to produce cannabis, other than cultivating and harvesting, and to sell cannabis.