Canntrust Holdings (TSX: TRST) (NYSE: CTST) allegedly has parties interested in purchasing its assets, according to a BNN Bloomberg article published this afternoon. The firm has allegedly had early-stage interest from “white knights” according to BNN’s sources.
While it has been identified that two cannabis firms have been approached by bankers to determine interest in buying the company’s assets, no companies were named on the matter.
BNN Bloomberg also reported that one cannabis producer had approached Health Canada to determine if they would be open to an outside party coming in to run Canntrust’s operations and right the ship. While it was not stated within the article, it is possible that this firm was RavenQuest Biomed, the firm that took control of Bonify Medical Cannabis following the discovery of illicit cannabis being brought into the legal system as a way for the firm to generate revenues and meet demand. RavenQuest’s CEO George Robinson was quoted in the article as stating “the phone’s ringing off the hook.”
Investors have long speculated that the firm would be forced to sell its assets and close up shop as a result of the illegal grow operation that Canntrust conducted in unlicensed grow space at their Pelham, Ontario, facility. The speculation was further compounded when it was found that Canntrust Holdings had exported this illegal product to Denmark, which is an international crime.
Investors have spent much time trying to determine the value of Canntrust’s assets since the fiasco began to unfold, with Fintwit ripe with speculation on just how hard the firm will be hit. Estimates have ranged widely on the core assets that the company has given the likely suspension of Canntrust’s license to cultivate cannabis. Without the required licensing at its facilities, the value of each facility is heavily in question among investors.
The situation regarding the status of Canntrust’s licensing is further set aflame by news earlier this week that Agrima Botanicals has officially had its license revoked following the initial suspension imposed by Health Canada. The firm was found to be selling product illegally to black market retailers. Many speculate the same fate is set for Canntrust, with Health Canada expected to make an example out of the producer to prevent future infractions by other licensed producers.
No licensed producers have as of yet stepped up to the plate to make a formal offer for Canntrust’s assets according to BNN Bloomberg’s sources, likely as a result of the unknown liability the firm will be subject to. Shareholders should hope for a resolution on the matter sooner rather than later however, as the financial impact is expected to be significant. As a result of Canntrust ceasing all sales of medical and recreational product, it is believed that the firm is losing over $187,000 per day in potential revenues.
Canntrust Holdings is currently trading at $2.97 on the New York Stock Exchange, up 3.86% on the day.
Information for this briefing was found via BNN Bloomberg and CannTrust Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.