CannTrust Will Pay Out A $ 39.6 Million Settlement for Investors
CannTrust Holdings Inc., a Canadian cannabis company, was charged with multiple class action lawsuits by their investors due to extended unlawful production scandals and sanctions that concluded to lose money.
CannTrust was put in the hot seat when they caught the eye of federal regulators due to the illegal production of marijuana.
An inspection was conducted at their facility by FED regulators, where it was found out that the company is using unlicensed areas to produce thousands of kilos of marijuana.
Former employees of CannTrust also reveal that illegal cannabis was placed behind fall walls to hide from Health Canada inspectors.
It was also reported that the cannabis seeds used to grow some of its legal products were obtained from the black market.
In July 2019, Health Canada issued a non-compliance order to the company, which suspended their license to produce a legal pot.
Soon after, the company’s stock price plummeted, resulting in a significant loss of money and investments.
Class Action Lawsuits and CannTrust’s Bankruptcy
Multiple investors who lost their money due to the scandal filed class action lawsuits against CannTrust in February 2020.
After a month, CannTrust filed for creditor protection due to bankruptcy, which allowed them to develop plans to address litigation that they will face.
CannTrust was removed from the New York and Toronto stock exchanges in April.
In June 2020, Health Canada reinstated CannTrust’s license to produce and sell legal pot. This is a result of the company’s considerable effort to reorganize and improve its policies and protocols.
The company started selling cannabis to the Canadian market for medical and recreational purposes.
CannTrust Holdings announced that a “restructuring support agreement” is in place to address claims from the lawsuits filed against them.
The settlement involves $ 39.6 million, which the company put in a trust for the benefit of the claimants.
The settlement is yet to be finalized by both parties, and it will require negotiations and good faith between them.
CannTrust has been producing cannabis for the Canadian market since 2013. In January 2021, it was reported that they have an estimated 61.2 million in cash on hand.
Editor’s Note On CannTrust Class Action Lawsuit:
This article is published to inform you of the latest class action lawsuit filed against CannTrust Holdings Inc. for illegal cannabis production resulting in a class action lawsuit.
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