Cannabis Industry Bump Natural, Says Cannabis Lawyer
Litigator Marie Henein Points to CannTrust, Her Current Case, as Part of the Problem – LPC
Cannabis lawyer and litigator Marie Henein said the cannabis industry bump in the road is a natural part of the business cycle. Henein is a partner at Toronto-based Henein Hutchison LLP. She said moving from an illegal cannabis market to a legal one is bound to cause problems.
“It’s just normal growing pains, I don’t think it’s anything extraordinary or unusual in terms of the outlook [for] the industry,” Henein said. The comments came on BNN Bloomberg last Tuesday. (Please see link below to full article and video.)
Two of the reasons for the cannabis industry bump are cannabis oversupply and disappointing cannabis sales. But Henein cited a third reason: regulatory issues caused by the fallout after CannTrust Holdings. Last year, CannTrust had its production licence suspended after it was found Health Canada inspectors missed cannabis rooms during an inspection.
In the video, Henein said that Health Canada regulations put extra pressures on companies. “You’re figuring out who can be compliant, who can run this as a pro-forma regular business, and who can’t meet the grade,” Henein said. The cannabis industry bump comes in part, she said, because some companies simply can’t.
“This was a bit of a circumstance where you had a confluence of factors that set the stage for people, perhaps, who were not meeting the standards we expect to just come into the market.”
Henein Expects Cannabis Industry Bump to Turn Around – LPC
Henein said the cannabis industry bump is just that: a bump that will turn around.
“There is a lot of enthusiasm still about this industry,” she said. “There are a lot of people who see its future financially. I think you’re seeing a recalibration.”
She also referred to licensing of new cannabis stores as part of the realignment. The Ontario government’s announcement that it would open up its retail cannabis market should help that turnaround.
Her interest at the moment is the effect CannTrust’s non-compliance had on its shareholders. Henein believes that CannTrust’s shareholders were lied to about illegal activities. They are therefore entitled to compensation.
“The best outcome is the greatest amount of recovery for the investors to put them back in their original position,” Henein said. “That’s our concern and we’re going to do our best to make sure the investors are protected and remediated.”
The stock market comes down to trust as much as anything else. So in that case, Henein has a point that CannTrust’s non-compliance could lead to questions about the industry as a whole. In terms of share price, that would certainly contribute to the cannabis industry bump in the road – at least for the short term in these early days. In the long term, some companies will do well as the industry grows. If you’re playing the stock market, the trick of course is to figure out which ones.
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