VAUGHAN, Ont. — CannTrust Holdings Inc. shares slipped Friday after the cannabis company said it is laying off as a lot of as 140 folks — roughly one particular quarter of its workforce — although 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 preceding close of $1.74, but regained some ground to close at $1.62.
The Vaughan, Ont.-primarily based pot producer mentioned late Thursday there will be a series of phased layoffs amongst 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 price up to $800,000 in severance payments if the workers are not recalled inside 35 weeks.
“This was a tough choice, but it is crucial that our workforce reflects the existing specifications of our business enterprise,” mentioned Robert Marcovitch, CannTrust‘s chairman and interim chief executive officer, in a statement.
“Reducing the company’s existing operating expenditures supports our economic sustainability and locations us in the most effective 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 Well being Canada, CannTrust mentioned.
CannTrust has been mired in turmoil considering that it disclosed in July that Well being 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 information and facts through an internal investigation. Well being 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 mentioned it submitted a detailed remediation strategy to Well being Canada on Oct. 21. It expects to comprehensive the perform described in the strategy by the finish of the very first quarter of 2020.
CannTrust’s remediation plan consists of an expanded internal instruction system, a strengthened governance and operations framework and infrastructure enhancements. It also consists of its previously announced strategy to destroy $77-million worth of plants and inventory that was not authorized below its licence.
“CannTrust is confident that its remediation strategy addresses all of the compliance troubles identified by Well being Canada,” mentioned Marcovitch.
CannTrust also said that a specific committee has completed its investigation into the causes of its non-compliance with the Well being Canada regulations and produced its report to the board of directors.
The firm mentioned its probe involved a complete independent overview of CannTrust’s e-mail and other documents, as nicely as interviews with existing and former workers, particular members of senior management and all members of the existing board of directors.
“Importantly, the specific committee’s investigation identified no proof that any of the remaining members of the board had been conscious of or engaged in any non-compliance troubles,” mentioned Mark Dawber, chair of the specific committee, in a statement.
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