What’s likely is someone’s going to wait until the company bleeds out further, before coming in to see what’s left’

CannTrust’s stock took another major hit on Monday after the embattled cannabis producer disclosed it had received a second non-compliance rating from Health Canada, this time in connection to its facility in Vaughan, Ont. 

The violations at the 60,000-square-foot manufacturing facility included converting five rooms into storage areas that were used to hold cannabis beginning in June 2018 and the construction of two new areas, one of which was used to store cannabis from November 2018 onwards, all without  approval from Health Canada.

The company’s shares plunged more than 27 per cent to close at $3.04 in Toronto, erasing much of a surprise gain they had posted on Friday. They remain well below the $6.46 mark at which they were trading six weeks ago, when the company first acknowledged it was being investigated for growing cannabis in unlicensed rooms in its Pelham, Ont., facility.

Health Canada conducted an inspection of the Vaughan facility between July 10 to July 16, which led to the most recent non-compliance order.

Since legalization, Health Canada had only conducted one other in-person inspection of that facility, on April 16, 2019, according to department spokesperson Tammy Jarbeau. [Read More @ Financial Post]