KAPLAN FOX INVESTIGATES CANNTRUST HOLDINGS INC. (CTST)

NEW YORK, July 8, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating claims on behalf of investors who purchased shares of CannTrust Holdings Inc. ("CannTrust" or the "Company") (NYSE: CTST) on the New York Stock Exchange.

On July 8, 2019, the Company disclosed that it received "a compliance report from Health Canada notifying the Company that its greenhouse facility in Pelham, Ontario is non-compliant with certain regulations."

The Company explained that the "non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees. Growing in unlicensed rooms took place from October 2018 to March 2019 during which time CannTrust had pending applications for these rooms with Health Canada. These rooms were constructed in accordance with regulations and Good Production Practices, and licenses were issued for each of the five rooms in April 2019. There are 12 rooms in total at the facility."

"Health Canada has placed a hold on inventory which includes approximately 5,200kg of dried cannabis that was harvested in the previously unlicensed rooms in Pelham, until it deems that the Company is compliant with regulations. In addition, CannTrust has instituted a voluntary hold of approximately 7,500kg of dried cannabis equivalent at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms."

According to MarketWatch, investment and research firm Harvest Moon Research said the seizure was likely due to the Company's "overall disregard for Health Canada regulations and its licensing systems." https://www.marketwatch.com/story/canntrust-shares-tumble-after-canadian-regulator-seizes-its-cannabis-2019-07-08/print

Harvest Moon reportedly stated that "the issue was brought to Health Canada's attention by former employees who were irked when the company's human resources department leaked its entire payroll information to every employee. That sparked a mini revolt, that led some of its staff to go to Health Canada to disclose how the company was breaking rules . . . Harvest Moon said a more serious issue is that CannTrust may have exported some of the illicit cannabis to markets it serves, which include Denmark and Australia. Under the Canadian Cannabis Act, that would be an indictable offense that could come with a prison term."

On July 8, 2019, at the start of trading, CannTrust shares declined over 21% on heavier than usual volume.   

If you purchased CannTrust shares on the New York Stock Exchange, and would like to discuss our investigation, please contact us by emailing [e-mail] or by calling 800-290-1952. 

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com.  If you have any questions about your rights or interests, please contact:

Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
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Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California  94104
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SOURCE Kaplan Fox & Kilsheimer LLP