CannTrust in Need of a “White Knight,” says Bloomberg

CannTrust in Need of a “White Knight,” says Bloomberg

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Things continue to look bleak for CannTrust, the embattled licensed producer who made headlines over its five unlicensed, hidden grow rooms.

The company certainly carved its name in the industry, winning or being nominated for multiple product awards. However, no amount of recognition will save them from an ever-worsening situation, as they face the very real possibility of losing their license entirely.

This spells bad news for the company’s employees, along with its shareholders, who have seen the stock take a nosedive. At this point, CannTrust cannot save itself, but according to BNN Bloomberg, hope comes from the outside.

In their opinion, an outside buyer could conceivably save the company from being shut down. But given the situation, whoever purchases CannTrust would be doing something heroic – a “white knight” willing to get the LP back on track.

 

“Take Them Out of Their Misery”

 

On the surface, it appears CannTrust wants to go it alone to get themselves back on track. In fact, they have been rather dodgy about whether they intend to consider selling to another organization. Bloomberg explains:

 

“When CannTrust CEO Peter Aceto was asked by BNN Bloomberg earlier this week to comment on whether he had any current offers on the table to sell the pot producer, he stated his focus remained on getting the firm back to compliance with the federal regulator.”

 

However, Norman Levine, a managing director at Portfolio Management Corp., disagrees – rather bluntly – with Aceto’s approach, saying, “I think it’s in everybody’s interest for someone to take them out of their misery.”

 

Levine’s comments, according to Bloomberg, appeared after rumours of two LPs being approached by bankers regarding a possible sale of CannTrust. But based on a recent revelation, those rumours are likely based in truth. Bloomberg reveals:

 

“…one cannabis producer has reached out to Health Canada to inquire if the federal regulator would be amenable to another company taking control of CannTrust to ensure the company becomes fully compliant with growing and processing legal pot.”

 

Although the baggage of the current situation makes CannTrust less palatable to potential buyers, Levine does add that the company still has many assets, facilities and resources that give it some appeal.

He is correct, of course. Aside from the physical equipment, CannTrust also owns three different recreational brands with plenty of products to choose from (assuming they start selling again).

 

Who is to Blame?

 

The inevitable result of disasters like these involves a substantial amount of finger-pointing. Someone obviously ordered these then-unlicensed grow rooms at CannTrust’s facility. Norman Levine is under no illusions (nor are we) – the process had to have involved management.

Levine says that he cannot imagine CannTrust’s upper executives not knowing what was going on. These are not the actions of employees cutting corners. This was deliberate. He says:

 

“It just seems too blatant to have happened. I think ultimately senior management would have to go, no matter who owns the company or if it remains independent. You need to start getting these acts cleaned up. Not everybody is going to survive.”

 

The expert warns that companies like CannTrust and Canopy Growth (who recently ousted its CEO), need to be able to impress major shareholders. Obviously, changes are necessary before that happens.

 

WeedAdvisor’s Emphasis on Compliance

 

WeedAdvisor has made it perfectly clear on multiple occasions that we favour the legal industry and adherence to its requirements. Man of our services are dedicated to policy compliance.

The real victims here are the over 70,000 clients who need to find new licensed producers, in addition to the employees whose positions could be in danger, buyout or not.

Ultimately, we wish CannTrust and any of its future partnerships the best of luck and only hope that they do not make the same mistake twice.

For those interested in following the rules, however, WeedAdvisor provides a variety of business solutions aimed at following regulations, documenting procedures for audits and real-time data tracking to catch potential violations before they become an issue.

 

 

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