Cronos Shares Drop 27% After Citron Report Raises Concerns About Disclosures
The company’s stock fell $4.38 to $11.99 with nearly 10 million shares traded on the Toronto Stock Exchange after a brief halt in afternoon trading.
The selloff came after U.S.-based Citron Research published a report accusing the company of deceiving investors by purposely not disclosing the size of distribution agreements with provinces, unlike other major cannabis players.
Citron managing editor Andrew Left says unnamed sources have indicated the agreements are too small to justify the premium investors are paying for the stock.
Canada’s cannabis stocks have been on a tear of late ahead of the legalization of recreational use of marijuana on Oct. 17.
However, the health-care sector was down almost two percent as several cannabis companies saw their stock prices fall.
Companies in this story: (TSX:CRON)
The Canadian Press