CannTrust Holdings (TSX: TRST) (NYSE: CTST) quietly announced yesterday that it was revising down its estimates for outdoor production. The news, largely drowned out by the announcement of Canopy Growth Corp’s co-CEO Bruce Linton being terminated, comes as the firm has failed to secure an outdoor production license from Health Canada.

CannTrust secured 81 acres for the purpose of outdoor production on April 2, in the province of British Columbia. Consisting of four parcels of land, its unknown whether or not the land is continuous. The purchase was part of a larger agreement to ultimately acquire 240 acres in total for outdoor production.

Upon acquiring the land, the company states that it set to work with erecting fencing and security requirements, along with establishing the necessary infrastructure for the grow. It’s believed that the final application to Health Canada was submitted in late April for licensing of CannTrust’s outdoor grow.

Commenting on the initial purchase, CEO Peter Aceto stated, “Cannabis harvested from this new location will be used to produce the Company’s award-winning oil products as well as its future product innovations as Canadian regulations expand to include new product formats.”

CannTrust Holdings expected initially to yield approximately 1,000 kg of cannabis per acre of production, provided the required licensing was achieved in a timely fashion. As a result of the delay in acquiring this license, the company has since revised down its overall estimate from 75,000 kg to that of roughly 15,000 kg. Canntrust has indicated that this figure is working under the assumption that its outdoor license is acquired within the next two weeks. Expected yields will decrease with each additional day that the firm does not receive the license.

CannTrust has given August 5, 2019 as the hard date after which it will not commence outdoor grow operations for the year. Guidance has remained the same for the 2020 planting season, with CannTrust expecting to yield between 100,000 and 200,000 kg of dried cannabis from the harvest, at a cost per gram of roughly $0.15.

While the company revised down its 2019 guidance for outdoor production as a result in the delay from Health Canada, nothing was stated by the company with respect to the anticipated impact to company operations. The harvested product was slated to be used for extraction purposes, as a result of the changes being implemented to cannabis product formats later this year by Health Canada. it’s unclear what material impact this will have on CannTrust Holdings at this time.

CannTrust Holdings closed yesterdays session at $6.54 on the Toronto Stock Exchange, up $0.01, or 0.15%, seemingly unimpaired by the material release issued in the early morning hours.

Information for this briefing was found via Sedar and CannTrust Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.