CannTrust has been in a lot of trouble lately, and things could soon get much worse for the disgraced licensed producer. Today, Bragar Eagel and Squire, a New York-based law firm that specializes in securities litigation, announced that it has begun investigating the company for the violation of federal securities law and other unlawful business practices on behalf of CannTrust investors.

If you’re an investor in CannTrust and would like to know more about the investigation, click here.

While it’s still early, the fact that the lawyers already smell blood does not bode well for CannTrust.


On July 8, Health Canada audited CannTrust’s greenhouse facility in Pelham, Ontario, and found the company was growing illegal cannabis in five unlicensed rooms. Due to this noncompliance, Health Canada has placed 5,200 kg of cannabis on hold, with CannTrust holding another 7,500 kg voluntarily, for a total of 12,700 kg. 

As reported by CTV, this is the “majority” of the company’s inventory, meaning cannabis shortages are all but guaranteed, and it’s significantly more than the 9,400 kg of cannabis the company grew in the last quarter.

CannTrust knows it made a mistake, but to hear them tell it, it was only a case of putting the cart before the horse, so to speak, as CannTrust CEO Peter Aceto told CTV:

“(The rooms) were constructed in a very compliant way with Health Canada… Where the mistake was made was plants were put in those rooms before the actual approvals were received,” chief executive Peter Aceto said.

Licensed Producers Behaving Badly

While CannTrust may be the latest licensed producer to be found non-compliant, it is not the first, by far. Other notable examples include Bonify, who was found in possession of 200 kg of illegal cannabis in December 2018, and Agrima Botanicals.

The fact that Health Canada keeps finding noncompliance within its licensed producers must be a huge embarrassment to the legal system and suggests that Health Canada’s cannabis regulations are so ridiculous and restrictive that even the legal producers are going against it.

Press Release

NEW YORK, July 08, 2019 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C. is investigating potential claims against CannTrust Holdings, Inc. (NYSE: CTST) on behalf of CannTrust investors. Our investigation concerns whether CannTrust has violated the federal securities laws and/or engaged in other unlawful business practices.

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On July 8, 2019, CannTrust announced its greenhouse facility in Pelham, Ontario, was audited by Health Canada and found “non-compliant.” Health Canada has placed a hold on 5,200 kilograms of dried cannabis that was harvested from five unlicensed rooms at the facility until it deems CannTrust compliant with regulations. Additionally, CannTrust said that it had instituted a voluntary hold on 7,500 kilograms of dried cannabis that was produced in the unlicensed rooms. News of this information drove the price of CannTrust shares down $0.99, or about 20%, closing at $3.83.

If you purchased or otherwise acquired CannTrust shares, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at, or telephone at (212) 355-4648, or by filling out this contact form.  There is no cost or obligation to you.

Bragar Eagel & Squire, P.C. is a New York-based law firm concentrating in commercial and securities litigation.  For additional information concerning our investigation into CannTrust please go to For additional information about Bragar Eagel & Squire, P.C. please go to  Attorney advertising.  Prior results do not guarantee similar outcomes.

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648

Featured image courtesy of Financial Post.