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CannTrust To Reduce Workforce By About 180 People

Canada-based CannTrust Holdings Inc. (CTST) said Thursday that it will reduce its workforce by about 180 people, or 20 percent, as part of a review of its operations.

The troubled cannabis company added that both the Special Committee of its Board and its new executive leadership team are continuing to make progress on bringing CannTrust's operations and procedures into full regulatory compliance.

In July, Health Canada found CannTrust to be non-compliant with regulations for growing cannabis in unlicensed greenhouse rooms and also for providing inaccurate information to the regulator.

"We have made the extremely difficult decision to restructure our workforce to reflect the current requirements of our business. These changes also position the Company to better serve our patients and customers with high quality, innovative products in the future," Robert Marcovitch, CannTrust's interim Chief Executive Officer, said in a statement on Thursday.

The majority of the employees affected by the job cuts were in cultivation and customer service support roles, the company noted.

CannTrust expects the workforce reduction to result in annual cash savings of about $9 million and also result in severance costs of about $2 million.

CannTrust noted that after Health Canada identified non-compliance in certain aspects of the company's operations, the company appointed a Special Committee of the board to investigate the causes of the non-compliance and to provide direction to its remediation efforts.

The company also terminated Chief Executive Officer Peter Aceto for cause and demanded the resignation of Chair Eric Paul, and placed a voluntary hold on the sale as well as shipment of all cannabis products.

Further, CannTrust said it developed a comprehensive remediation strategy to achieve full compliance with Health Canada's regulations and commenced a review of its strategy and business plan.

In early August, CannTrust said it is reviewing strategic alternatives, including a possible sale of the company.

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