CannTrust Holdings Inc.’s licences to produce and sell recreational and medical cannabis in Canada were suspended by federal regulators on Tuesday, the latest blow to the beleaguered pot firm after an inspection uncovered that it grew thousands of kilograms of marijuana in unlicensed rooms.

CannTrust said in a statement that it received notice from Health Canada earlier Tuesday morning that it won’t be able to sell and produce cannabis, other than cultivating and harvesting existing plants.

“While the suspension remains in effect, CannTrust will be permitted to cultivate and harvest existing lots or batches previously propagated, as well as conducting ancillary activities to those lots, including drying, trimming and milling. During the suspension, CannTrust may not propagate new lots or batches of cannabis or engage in the sale or distribution of cannabis,” the company said in a statement.

CannTrust added the notice from Health Canada states the regulator could reinstate its licences “if the reasons for the suspension no longer exist or if CannTrust demonstrates that the suspension was unfounded.” The Vaughan, Ont.-based company said its management and board are reviewing the notice with its counsel and other advisors.

CannTrust said federal regulators listed several measures that the firm could implement, which would address the various public health and safety risks that contributed to Health Canada’s partial suspension.

In a separate statement sent to BNN Bloomberg, CannTrust said the company’s remediation efforts are underway and “significant progress has been made” in its operations to comply with Health Canada’s regulations.

“CannTrust’s paramount and urgent priority is to satisfy regulators that the company meets or exceeds all regulatory requirements so that the reasons for suspension no longer exist, we are in a position to resume operations and to regain the trust and confidence of our shareholders, patients, customers and partners,” said Robert Marcovitch, the company’s interim CEO, in an emailed statement.

CannTrust has been in a state of turmoil since July 8 when it revealed it had breached Canadian regulations by growing marijuana in unlicensed areas of its Pelham, Ont.-based facility.

As a result of that infraction, Health Canada seized nearly 5,200 kilograms of dried cannabis and the company instituted a voluntary hold on approximately 7,500 kg at another facility.

The pot firm has also fired CEO Peter Aceto with cause, demanded the resignation of chairman Eric Paul and formed a special committee tasked with probing the regulatory scandal. CannTrust also hired Greenhill & Co. as a financial advisor to explore a sale of the company, strategic investment or a business combination.

In August, CannTrust said Health Canada found that its Vaughan manufacturing facility was non-compliant as well. CannTrust also disclosed last month that the Ontario Securities Commission’s Joint Serious Offences Team had opened an investigation into “matters and parties” related to the company.

Earlier this month, BNN Bloomberg reported that some CannTrust staff late last year brought cannabis seeds from the black market into production rooms, leading to some illicitly-grown pot flowing into the legal market. 

CannTrust now joins a handful of Canadian cannabis producers which have had their ability to grow and sell legal cannabis suspended by Health Canada, the federal regulator in charge of enforcing and licensing pot in the country.

Last week, British Columbia-based Evergreen Medicinal Supply Inc.’s licence was suspended due to issues relating to its production practices, record-keeping, inventory control, and adherence to licence controls. In February, Bonify Holdings Corp.’s licences were suspended after the company was found to be selling marijuana it obtained from illicit sources.

The marijuana stock market has shifted very rapidly over the course of the past few years. With so many pot stocks to watch and pot stocks to choose from, it seems as though the choice can be quite difficult. This choice, however, is just the reason you’re here. One of the key things to note about pot stocks is that they come from all around the industry. Companies in the cannabis stock market can be ancillary businesses such as marketing and packaging companies. Additionally, they can also be the raw growers of the substance itself.

All of these varying businesses have different reasons that make them pot stocks to watch. One of the key things to note is that these companies do usually come with a higher level of volatility than most. This is simply due to the fact that the pot stock market is still very much one of infancy. Volatility, however, can be positive for some investors as it allows for larger gains. One should keep in mind that it also can account for larger losses. All in all, these marijuana stocks to watch are working to shift the future of the industry for the better.

A Scientific Approach to Cannabis

Stilcanna Inc. (STIL Stock Report) (SCNNF Stock Report) is one of the leading CBD based businesses currently working out of the European extraction market. The company has stated that its proprietary technology allows them to have a larger scale CBD operation at a lower cost than most other competitors in the pot stock market. Within Europe, they have already signed into an exclusive contract for Dragonfly Biosciences LLC, a UK based CBD supplier. The company has stated that they also are working on the acquisition of other businesses in the pot stock market. With this, they should be able to grow their influence within the marijuana stock market overall and more specifically in Europe.

The company recently put out an operational update regarding their extraction facility based in Romania. With this new venture, they should be able to double the capacity of their current extraction equipment, where they then can fine-tune it to be fully up for industrial-scale production. When the machines are up and running, they will hopefully be able to produce any mixture of CBD-related compounds that a customer could order. For this reason among others, they remain a key pot stock to watch moving forward.

An Ancillary Pot Stock to Consider

KushCo Holdings (KSHB Stock Report) is one of the leading ancillary pot stocks in the market. The company has gone from a packaging solutions business to one with many facets spanning the whole pot stock market. The company currently operates in several different aspects of the cannabis stock market.

This includes extraction technology, infused edibles, packaging and branding solutions and more. Because they have such a broad scope, it seems as though they remain an interesting pot stock to watch. The company has made sure that they are working toward shifting the future of the pot stock market overall as it inevitably continues to change.

The Florida Department of Agriculture expects to receive 8,000 applications by December and issue 3,000 cultivation permits early next year when the state rolls out its new industrial hemp program.

Some officials estimate the crop could eventually spawn a $30 billion annual industry in the Sunshine State but, as the Senate Agriculture Committee learned Tuesday, the rosy prospectus comes with thorns.

While 37 states have authorized industrial hemp programs in the two years since the crop was legalized under the federal 2018 Farm Bill, all await approval and guidance from the U.S. Department of Agriculture (USDA).

Yet, according to HempBenchmarks.com, there are already more than 400,000 acres producing hemp in 34 states under the 2014 Farm Bill’s pilot program, outpacing processing capacity and market development. As a result, the new domestic commodity’s price has been falling since May.

Nevertheless, State Director of Cannabis Holly Bell told lawmakers, “homegrown” hemp will be a “several million dollar industry that will become hundreds of millions in the next two years.”

Bell said Colorado, Vermont, New York, Kentucky and Tennessee are among states that have given farmers the green light to grow hemp after submitting plans to the USDA months ago without any federal interference.

Florida will do as well in early 2020, Bell said, although she expects USDA guidance before year’s end.

“Everybody else is doing it,” she said. The USDA has “not intervened and stopped any state. By December, if everything goes well, our team is ready to issue permits.”

Bell, hired in February by Agriculture Commissioner Nikki Fried as the state’s first cannabis czar after helping Tennessee establish its hemp industry during two decades of developing marijuana industries, said Florida’s program will include a workforce component and an automated permit process.

Without the USDA’s approval of the state’s program, however, Agriculture Committee Chairman Sen. Ben Albritton, R-Bartow, a Central Florida farmer, said many farmers who may be interested in adding hemp to their crop mix, – like himself – will be hesitant to do so until the feds sign off.

Sen. Bill Montford, D-Tallahassee, said hemp could be help the Panhandle recover from 2018’s Hurricane Michael.

In a February hearing before the Senate Agriculture Committee on Senate Bill 1020 – the 2019 bill lawmakers approved to create the state’s hemp program – University of Florida North Florida Research & Education Center Director Glen Aiken recommended hemp and hops as alternative crops for Panhandle farmers recovering from October’s Category 5 storm.

Aiken said there is increasing demand for hemp, which can be used for high-quality fibers and ropes, clothing, even as food.

“I know of an entrepreneur in Kentucky that processes hemp sausage,” he said. “It’s hemp and pork combined. I had some. It’s not the best sausage I’ve ever ate, but it wasn’t too bad either.”

During Tuesday’s pre-session committee primer, agricultural scientists from the University of Florida and FAMU gave presentations of hemp’s prospects in the Sunshine State.

UF Director Dr. Robert Gilbert feared growers could “get ahead of the science” on hemp and said there will be an “emerging crops” summit sometime soon.

Creating a state industrial hemp program has been a priority for Fried since she assumed office in January after being the only Democrat elected to a statewide office in November.

“It’s going to cause an industrial revolution in our state and across the country,” she said in support of SB 1020, noting hemp has as many as 35,000 different uses and its market as a cash crop is only getting brighter as it is considered as a biodegradable replacement for Styrofoam, plastic and paper.

SB 1020, sponsored by Sen. Rob Bradley, R-Fleming Island, was adopted by the House in a 112-1 vote and by the Senate in a 39-0 tally.