Shares of CannTrust surged 15 percent on Friday after the Canadian cannabis company announced it terminated CEO Peter Aceto in the midst of regulatory drama that has plundered the company's stock value.
"The investigation into the Company's non-compliance with Health Canada regulations and ancillary matters uncovered new information that has resulted in a determination by the Board to terminate with cause CannTrust CEO Peter Aceto," CannTrust wrote in a statement.
The board also "demanded" the resignation of chair Eric Paul. Special Committee Chair Robert Marcovitch, who joined the company from K2 Sports, has stepped in as interim CEO.
"Our first priority is to complete the remaining items of our investigation and bring the Company's operations into full regulatory compliance. Implementing the necessary changes is essential to the interests of our medical patients, customers, shareholders and employees," Marcovitch wrote in a statement.
The company said it is preparing to make additional operational changes in the coming weeks.
CannTrust revealed on July 8 that Health Canada was auditing the company for growing cannabis in unlicensed rooms in one of its facilities. Some of cannabis grown in those rooms, unlicensed between the months of October and March, made its way as far as Denmark. Health Canada placed a hold on tens of thousands of pounds of the company's cannabis inventory, before CannTrust placed a voluntary hold on all sales.
Since the disclosure, things have gotten demonstrably worse for the Vaughan, Canada-based company. A whistleblower alleged the company went to extremes to hide its unlawful behavior, and a Globe and Mail report revealed Paul and Aceto had knowledge of the illicit grow as early as November. Health Canada's investigation could result in penalties up to and including CannTrust's de-listing from the New York Stock Exchange, or having its federal license revoked.
Jefferies' analyst Ryan Tomkins predicted the management shuffle in a Wednesday note, which called management's positions "untenable."
"In CannTrust's case, where it is now becoming apparent that management were aware of non-compliance and chose not to correct it, we see wholesale executive changes necessary at the very least if HC are to uphold their license following suspension. With management arguably less suited for the industry (no prior cannabis/consumer/healthcare experience) we see changes as both likely and necessary," he wrote.
CannTrust's stock has tumbled more than 50 percent since it disclosed Health Canada's investigation on July 8.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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