CannTrust (CTST) Stock Is A Buy For Those Who Tolerate Risk

CannTrust CTST Stock News

CannTrust Holdings Inc (NYSE: CTST) is tumbling hard today, continuing oin its tremendous declines since the company was caught red handed operating illegal grow rooms. This is a big story, and an investment in the stock is risky, but everyone is already talking about the risk. What about the opportunity?

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

CTST Announces Withdrawn Report

Before we get into the opportunity here, let’s talk about the news that was released this morning. KPMG is withdrawing its report on the company’s financial statements for 2018 as well as the March quarter. Unfortunately, these reports can no longer be considered reliable.

KPMG said that after a special committee shared new information with it, it made the decision to pull its report. This information included details that led to the firing of CannTrust’s CEO and forced resignation of its chairman.

CTST Stock Could Be Presenting A Tremendous Opportunity

We all know about the risks. Health Canada can pull the company’s license to grow and distribute cannabis. That would be a big hit, essentially putting CTST out of business.

Nonetheless, if that doesn’t happen, there could be a tremendous opportunity brewing. First, let’s talk about the argument that Health Canada is not likely to pull the company’s license.

Think about it, the cannabis industry is a massive and emerging one in Canada. Moreover, growers are struggling to keep up with demand as demand continues to fly.

If Health Canada were to pull the license, it would be eliminating a large source of cannabis production in the region. Moreover, management changes and company announcements are likely to lead to further leniency. So, there’s an argument brewing that the more likely result would be a fine. Allbeit, a painful one, but a fine nonetheless.

If this is the case, the opportunity here could be huge. Should CTST maintain its license to grow and distribute cannabis, it would essentially be back to business as usual. Sure, it would need to find a strong CEO to take charge of the company and it have an uphill battle. At the same time, it would be drastically undervalued from recent declines and have all the tools necessary to build back up rapidly.

Considering all of the short interest and the company’s potential to bounce back should it maintain its licensing, this stock could rocket with a positive result from Health Canada. Of course, as mentioned above, making a move on this idea would be a very risky one. However, for those with a large appetite for risk could see tremendous growth in CTST.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

Never Miss The News Again!

Join our mailing list below for free real-time updates!

Subscribe Today!

* indicates required

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.