GrowGeneration Corp. shares rallied Wednesday to mark a rare splash of green in a falling cannabis sector that is still under pressure from the revelations of illegal activity at CannTrust Holdings Inc.

Shares of GrowGeneration, which owns and operates specialty retail hydroponic and organic gardening stores serving the cannabis industry, soared 8%, after the company said it has appointed former Home Depot Chief Executive Bob Nardelli as strategic adviser. The executive, who headed the home-improvement store chain from 2000 to 2007, will be tasked with helping the company find partnerships and refine its merchandising, branding and new product launches, among other matters.

“I believe GrowGeneration GRWG, +1.89% has a solid execution track record, is strongly differentiated from its peers, has achieved scale throughout the supply chain of the hydroponic industry, and is poised to go to the next level,” Nardelli said in a statement.

CannTrust shares US:CTST CA:TRST tumbled another 10% to bring their week-to-date losses to 34%, after the Canadian regulator seized its cannabis after discovering it was growing in unlicensed rooms at its Pelham facility. Adding to the gloom, on Tuesday, CannTrust’s Danish partner Stenocare A/S said it had sold some of the illegal pot to its patients, meaning it was exported out of Canada.

The Canadian Cannabis Act forbids the export of unlicensed cannabis and says anyone who does so is guilty of an indictable offense and liable to imprisonment or fines. Health Canada did not immediately respond to a request for comment.

See: Cannabis stocks dragged down by CannTrust’s losses after cannabis seizure

In an emailed statement, a CannTrust spokeswoman said, “CannTrust has confirmed that all but one product lot received by Stenocare have been cultivated in fully licensed rooms. Stenocare informed the Danish Medicines Agency that the single, noncompliant lot has been placed on hold pending the outcome of the ongoing investigation by Health Canada.”

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GMP analyst Ryan Macdonell said the news is creating an overhang on the shares, but that he will not adjust forecasts until there is clarity on Health Canada’s next moves.

“In our view, the announcement and the ensuing selloff in TRST shares has likely shaken investor confidence considerably. We expect that it could take time for CannTrust to regain this confidence and that the shares could trade at a discount to peers for some time,” Macdonell wrote in a note.

MedMen Enterprises Inc. shares MMNFF, -0.06% fell 1.4%, after the medical cannabis dispensary said it has received an additional $30 million equity investment from Gotham Green Partners, with participation from Wicklow Capital. That brings the total financing commitment led by Gotham to $280 million. Gotham has so far funded $100 million of the total commitment.

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“Both Gotham Green and Wicklow have shown continued confidence in our strategy and recognize the potential ahead,” said MedMen Chief Executive Adam Bierman.

In regulatory news, a congressional committee is holding its first-ever hearing Wednesday on ending the federal ban on cannabis. The hearing is expected to hear from a range of constituents on the many issues relating to cannabis reform, including the unjust burden that communities of color suffered during the war on drugs.

“Legalization has not generated a reduction of the rate at which Black and Latino people are arrested in these states,” said Shadawn Reddick-Smith, House Judiciary Committee communications director for the Democrats in emailed comments. “In fact, many states have seen an even steeper rise in the percentage of African-Americans and Latinos having their lives impacted by a marijuana arrest.”

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KushCo Holdings Inc. shares KSHB, -5.40% fell 0.8%, shrugging off a positive note from Canaccord analysts, reiterating a speculative buy rating and $7.50 price target that is 50% above the stock’s current trading level.

“We believe continuing improvement for gross margin and a looming Nasdaq up-list will act as positive catalysts for the shares over coming months,” analyst Bobby Burleson wrote in a note to clients. “ Notably, the company is leveraging its growing scale to secure better pricing from suppliers and terms with customers. “

Elsewhere, Aurora Cannabis Inc. shares ACB, -4.32% ACB, -3.32% were up 0.3%, Cronos Group Inc. CRON, -2.24% was down 0.8%, Hexo Corp. HEXO, +1.92% was down 0.6% and Tilray Inc. TLRY, +0.63% was up 2.3%.

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Aphria shares APHA, +0.35% APHA, +0.89% were down 0.7%, Green Growth Brands Inc. GGBXF, -5.58% was down 5.5% and Organigram Holdings Inc. OGI, -2.76% was down 4.2%.

The ETFMG Alternative Harvest ETF MJ, was down 0.4%, with 20 of its 38 constituent stocks moving lower. The Horizons Marijuana Life Sciences ETF HMMJ, +0.60% was down 0.1%, with 27 of its 54 constituent stocks falling. The new Cannabis ETF THCX, +1.11% launched Tuesday by Innovation Shares was down 0.5%.