Cannabis stocks had a case of the Mondays, with broad losses across North American markets.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, dropped 1.4% to 233.5 points on Monday. The Horizons Marijuana Life Sciences Index ETF was down 1.2% to C$17.91. The OTCQX Cannabis Index slipped 1.7% at 727 points.
Leading the headlines on Monday was CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF), which was dinged by Health Canada for growing cannabis in five grow rooms that didn't have a licence to operate at its Pelham, Ontario facility.
Shares plummeted 19.8% at C$5.18 in Toronto and fell 19.8% at US$3.96 in New York.
CannTrust said in a statement it has accepted Health Canada's non-compliance finding and has taken actions to ensure current and future compliance.
"Our team has focused on building a culture of transparency, trust and excellence in every aspect of our business, including our interactions with the regulator. We have made many changes to make this right with Health Canada. We made errors in judgement, but the lessons we have learned here will serve us well moving forward," said CEO Peter Aceto.
READ: Cannabis grower CannTrust Holdings' 1Q earnings beats Street estimates on higher production, distribution
Other laggards Monday included Canopy Growth Corporation (TSE:WEED) (NYSE:CGC), close to a week after Bruce Linton, former co-CEO, told media he was fired from the Canadian cannabis company he founded in 2013.
Shares on Monday lagged, down 2.4% at C$51.38 in Toronto and down 2.2% at US$39.28 in New York.
Linton’s immediate departure came after the Smith Falls, Ontario-based cannabis grower posted a wider-than-expected fiscal fourth-quarter loss last month, which unnerved both investors and the industry. In media interviews, Linton said he had been terminated by the company’s board of directors, a board heavily represented by Canopy's largest investor, US beverage giant Constellation Brands, which has a $5 billion stake in the firm.
The company did not release any news.
There were few buds to speak of Monday, but a handful of stocks bucked the downward trend.
Last week, the firm hit a major milestone as it completed its final phase of construction of its cannabis cultivation expansion in Nevada and receiving a permanent occupancy permit for its Las Vegas facility. The building consists of 15 bloom rooms, three veg rooms for baby plants and one clone room. The initial operating capacity is roughly 22,000 sq/ft, with the option to expand into an additional 18,000 sq/ft.
The move allows 1933 Industries' subsidiary Alternative Medicine Association to move into the facility and begin cultivation.
The firm is set to release its quarterly earnings on Monday.
Contact Katie Lewis at [email protected]