Cannabis stocks continued to drop this week after the second bombshell report in as many days sent shockwaves through the sector.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, fell 1.2% to hit 208.6 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF lost 1.1% to C$16.54 and the OTCQX Cannabis Index dropped 1.3% to 673.6 points.
CannTrust Holdings Inc (NYSE:CTST) (TSE:TRST) was by far the day’s biggest loser after a report from Globe and Mail indicated that company executives knew the group was growing marijuana in unlicensed rooms seven months before a Health Canada investigation revealed it earlier this month.
The report published Tuesday night laid out internal emails that demonstrated CEO Peter Aceto and Chairman Eric Paul were notified of the violation well before Health Canada discovered it earlier this month.
CannTrust stock swooned 20% to US$2.10 on the NYSE and nearly 22% to C$2.68 on the TSX.
Wednesday’s fall is the latest in what has been a disastrous month for CannTrust. Since Health Canada first uncovered that the company was growing in unlicensed rooms on July 8, its shares have plummeted by almost 58% in New York.
Another laggard was Curaleaf Holdings Inc (CSE:CURA) (OTCMKTS:CURLF), which continued to slide a day after the company was cautioned by the US Food and Drug Administration for allegedly illegally selling unapproved products containing CBD online with unsubstantiated claims that the products treat cancer.
Shares fell 2.3% to C$9.53 on the CSE and 2% to US$7.25 on OTC Markets.
A handful of companies were able to escape the downward pull, including 1933 Industries Inc (CSE:TGIF) (OTCMKTS:TGIFF), which grew by nearly 5% to C$0.43 on the CSE and 3.1% to US$0.32 on OTC Markets.
Contact Andrew Kessel at [email protected]
Follow him on Twitter @andrew_kessel