CannTrust Announces Court Approval of Plan of Compromise, Arrangement and Reorganization
CannTrust Holdings announced the Ontario Superior Court's sanction of its Fourth Amended & Restated CCAA Plan on July 7, 2021. The plan's implementation is subject to conditions, expected within three to five months. CEO Greg Guyatt emphasized progress despite challenges, including ongoing talks with the Ontario Securities Commission regarding past disclosure defaults and plans for a new auditor. CannTrust has relaunched cannabis brands and expanded its product line while navigating the regulatory landscape post-CCAA.
- Court sanctioned the CCAA Plan, indicating steps toward financial restructuring.
- Plans to announce a new independent auditor, which could improve compliance.
- Successful relaunch of recreational cannabis brands and expansion of product offerings.
- Implementation of the CCAA Plan is contingent on several conditions.
- Discussions with the Ontario Securities Commission regarding historical disclosure defaults are in preliminary stages, with no guarantee of success.
- Historical cease-trade order remains in effect, impacting share trading opportunities.
VAUGHAN, ON, July 16, 2021 /PRNewswire/ - CannTrust Holdings Inc. ("CannTrust" or the "Company") (unlisted) announced today that its Fourth Amended & Restated Plan of Compromise, Arrangement and Reorganization dated July 7, 2021 (the "CCAA Plan") was sanctioned by the Ontario Superior Court of Justice (the "Court") in connection with the Company's restructuring proceedings under the Companies' Creditors Arrangement Act (the "CCAA").
Implementation of the CCAA Plan remains subject to a number of conditions, including the U.S. Approval Order being entered in the U.S. Class Action and the expiration of applicable appeal periods. CannTrust expects the conditions to be satisfied and implementation of the plan to occur in three to five months, or in the fourth quarter of 2021.
"Having the CCAA Plan sanctioned is another significant milestone in our CCAA journey and we are pleased to have made progress towards plan implementation." said Greg Guyatt, Chief Executive Officer at CannTrust. "While we are eager to complete the plan implementation, our operational focus continues to be on surprising and delighting our consumers with quality products for those who want and need them."
As previously disclosed, CannTrust anticipates announcing the engagement of a replacement independent auditor during the third quarter of 2021 and has initiated discussions with the Ontario Securities Commission (the "OSC") about proposing a plan and timetable for curing the Company's historical disclosure defaults. Following the engagement of a replacement auditor, the Company anticipates submitting an application to the OSC for a discretionary order revoking the OSC's cease-trade order dated April 13, 2020 and seeking a new listing for CannTrust's common shares on a Canadian stock exchange. Although those discussions remain at a preliminary stage, CannTrust is working towards the completion, filing and mailing of its audited financial statements for 2020 and 2021 during the second quarter of 2022. Resolving CannTrust's historical disclosure defaults will require a considerable amount of management time and expense and there can be no assurance that the Company will be successful in obtaining an order from the OSC or obtaining a listing for CannTrust's common shares.
CannTrust has made progress on its objective to fully restore its operations as a Canadian recreational and medical cannabis producer. In late 2020, CannTrust relaunched two recreational cannabis brands in the Canadian market, liiv and SYNR.G, and introduced a new medical cannabis brand, estora medical in early 2021. Recreational products are now available in six provinces, while medical products are available nationwide. Since relaunch, the company has expanded its product portfolio and now offers vapes and pre-rolls in addition to its dried flower, oil and capsule products. The company continues to remain focused on the future and is planning for additional product launches in the latter half of 2021.
Aspects of the ongoing efforts remain confidential, and the Company is unable to predict with any certainty either their timing or outcome. For more information about CannTrust's CCAA proceedings, please visit: www.ey.com/ca/canntrust.
About CannTrust
CannTrust is a federally regulated licensed cannabis producer. We are proudly Canadian, operating a portfolio of brands including estora, Liiv and Synr.g, specifically designed to surprise and delight patients and consumers.
At CannTrust, we are committed to providing an exceptional customer experience, as well as consistent and quality products through standardized processes. Our greenhouse produces Grade A cannabis flower, with products currently being sold in dried flower, pre-roll, vape, oil drops and capsule formats. Founded in 2013, our continued success in the medical cannabis market and subsequent expansion into the recreational business, led to us being named Licensed Producer of the Year at the Canadian Cannabis Awards 2018.
CannTrust is committed to research and innovation, investing in developing technologies for new products in the medical, recreational, and wellness markets, while contributing to the growing body of evidence-based research regarding the use and efficacy of cannabis.
Learn more at www.canntrust.com.
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 expectation that the U.S. Approval Order will be entered into the U.S. Class Action, appeals will not be brought forward during the applicable appeal periods, the CCAA Plan will be successfully implemented in three to five months or in the fourth quarter of 2021, CannTrust will announce a successor auditor during the third quarter of 2021, obtain a discretionary order revoking the cease-trade order and obtain a stock exchange listing for its common shares. Forward-looking information and statements necessarily involve known and unknown risks, including, without limitation: the outcome of the Company's contingent liabilities; the impact of any regulatory and other investigations; the Company's ongoing review of strategic and financing alternatives; 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 state of the cannabis industry in Canada generally; the willingness of a public accounting firm to accept an engagement as the Company's independent auditor; CannTrust's ability to timely cure its disclosure defaults and obtain an order revoking the OSC's cease-trade order; the willingness of a stock exchange to list the Company's common shares and CannTrust's ability to satisfy the requirements of such exchange; and, the ability of CannTrust to successfully 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 "March 2019 Form 40-F"). 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. Readers are also reminded that CannTrust remains in default of its periodic disclosure requirements under applicable securities laws and stock exchange requirements, that its most recent AIF, Form 40-F and other disclosures do not reflect all risk factors that currently face the Company, and that the Company has not completed or filed the restatements of the financial statements included in the AIF or the March 2019 Form 40-F or otherwise filed an amendment to such Form 40-F, and that the Company has determined not to correct its prior filings or make any further filings in respect of periodic disclosure requirements under applicable securities laws and stock exchange requirements. None of the Company's securities is listed for trading on any stock exchange in any jurisdiction and, in Canada, trading in the Company's securities is subject to a cease-trade order issued on April 13, 2020 by the Ontario Securities Commission for CannTrust's failure to comply with its disclosure obligations under applicable securities laws.
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SOURCE CannTrust Holdings Inc.
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