CannTrust Holdings Inc (TSX:TRST)(NYSE:CTST) has had a rough year in 2019, with its share price falling by more than 80%. In the past month, however, it has risen 10% and it’s trading over $1 per share as it approaches the start of a new year. With CannTrust out of the news of late, investors may be wondering whether it’s a good time to buy the stock.
However, despite its low price, there’s still a lot of risk surrounding the stock. For one, the company needs to get its license reinstated to sell and grow marijuana back, otherwise there’s still no business to invest in.
It also needs to get its quarterly earnings filed as both the NYSE and TSX could de-list its shares for failing to comply with listing requirements. And so while the stock may appear to be cheap today, it’s still far from being out of the woods just yet. It could continue to decline even further in the new year if it doesn’t get some good news soon.
Investors have already been bearish on pot stocks since CannTrust’s illegal growing scandal first came to light back in the summer and without a positive resolution on that, the stock is going to remain a very speculative and risky buy today.
That’s why investors will want to stay on the sidelines until there’s more certainty around what happens with the company before investing in it. As bad as the stock has done this past year, 2020 could be an even worse year.