As part of its Review of Operations, CannTrust reduces workforce
and spend while preserving key talent
VAUGHAN, ON, Sept. 5, 2019 /PRNewswire/ - CannTrust Holdings
Inc. ("CannTrust" or the "Company") (TSX: TRST, NYSE: CTST)
announced today that both the Special Committee of its Board and
its new executive leadership team continue to make progress on
bringing CannTrust's operations and procedures into full regulatory
compliance and ensuring the Company's future. As part of these
efforts, the Company is reducing its workforce.
"We have made the extremely difficult decision to restructure
our workforce to reflect the current requirements of our business,"
said Mr. Robert Marcovitch,
CannTrust's interim Chief Executive Officer. "These changes
also position the Company to better serve our patients and
customers with high quality, innovative products in the
future."
CannTrust reduced its workforce by approximately 180 people, or
20%. This action is expected to result in annual cash savings of
about $9 million, as well as the
Company recording approximately $2
million in severance costs. The majority of the
affected employees were in cultivation and customer service support
roles.
"Over the past two months, we have moved swiftly to assess and
address the Health Canada report indicating areas of non-compliance
in our operations, as well as the findings of the Special
Committee's independent investigation," continued Mr. Marcovitch.
"We remain fully committed to building the organization we need for
future success and rebuilding the trust of all of our
stakeholders."
Since CannTrust's announcement in July of Health Canada
identifying non-compliance in certain aspects of the Company's
operations, the Company has:
- Appointed a Special Committee of the board to investigate the
causes and extent of the Company's non-compliance and to provide
oversight and direction to the Company's remediation efforts and
strategic review
- Retained independent advisors to investigate and remediate the
Company's non-compliance under the supervision of the Special
Committee
- Terminated Chief Executive Officer, Mr. Peter Aceto for cause and demanded the
resignation of Chair, Mr. Eric
Paul
- Appointed Mr. Robert Marcovitch
as interim Chief Executive Officer
- Placed a voluntary hold on the sale and shipment of all
cannabis products
- Developed a comprehensive remediation strategy to achieve full
compliance with Health Canada's regulations
- Commenced a review of the Company's strategy and business
plan
"CannTrust is committed to acting decisively on the findings
from the Special Committee's investigation and on executing its
Remediation Plan in a timely manner," concluded Mr.
Marcovitch. "Furthermore, we are currently developing a
comprehensive go-forward business strategy. I look forward to
sharing our vision for CannTrust's successful future over the weeks
and months to come."
About CannTrust
CannTrust is a federally regulated
licensed producer of medical and recreational cannabis
in Canada. Founded by pharmacists, CannTrust brings many years
of pharmaceutical and healthcare experience to the medical cannabis
industry and serves medical patients with its dried, extract and
capsule products. The Company operates its Niagara Perpetual
Harvest Facility in Pelham, Ontario, and prepares and packages its product
portfolio at its manufacturing centre in Vaughan, Ontario. The Company has also purchased 81
acres of land in British Columbia and expects to secure
over 240 acres of land in total for low-cost outdoor cultivation
which it will use for its extraction-based products.
Forward-Looking Statements
This press release contains
"forward-looking information" within the meaning of Canadian
Securities laws and "forward-looking statements" within the meaning
of the United States Private Securities Litigation Reform Act of
1995 and other applicable United
States safe harbor laws, and such statements are based upon
CannTrust's current internal expectations, estimates, projections,
assumptions and beliefs and views of future events. Forward-looking
information and forward-looking statements can be identified by the
use of forward-looking terminology such as "believes", "expect",
"likely", "may", "will", "should", "intend", "anticipate",
"potential", "proposed", "estimate" and other similar words,
including negative and grammatical variations thereof, or
statements that certain events or conditions "may", "would" or
"will" happen, or by discussions of strategy.
The forward-looking information and statements in this news
release include statements relating to the corrective actions being
taken by the Company, and Health Canada's pending determinations.
Forward-looking information and statements necessarily involve
known and unknown risks, including, without limitation: actions
taken in respect of the Company's products by its customers and
regulators; results of Health Canada's investigation, including
orders and compliance measures required by Health Canada and their
impact on the operations, inventory, assets and financial condition
of the Company; the Company's implementation of remediation plans
and related actions; regulatory approval; risks associated with
general economic conditions; adverse industry events; loss of
markets; future legislative and regulatory developments in
Canada, the United States and elsewhere; the cannabis
industry in Canada generally; and,
the ability of CannTrust to implement its business strategies.
Any forward-looking information and statements speak only as of
the date on which they are made, and, except as required by law,
CannTrust does not undertake any obligation to update or revise any
forward-looking information or statements, whether as a result of
new information, future events or otherwise. New factors emerge
from time to time, and it is not possible for CannTrust to predict
all such factors. When considering these forward-looking
information and statements, readers should keep in mind the risk
factors and other cautionary statements in CannTrust's Annual
Information Form dated March 28, 2019
(the "AIF") and filed with the applicable Canadian securities
regulatory authorities on SEDAR at www.sedar.com and filed as an
exhibit CannTrust's Form 40-F annual report under the United States
Securities Exchange Act of 1934, as amended, with the United States
Securities and Exchange Commission on EDGAR at www.sec.gov. The
risk factors and other factors noted in the AIF could cause actual
events or results to differ materially from those described in any
forward-looking information or statements.
The TSX and NYSE do not accept responsibility for the adequacy
or accuracy of this release.
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SOURCE CannTrust Holdings Inc.