CannTrust Holdings Inc. said Thursday it may have to shutter its business entirely because it won’t have enough liquidity to operate much longer unless it strikes a deal with potential investors or strategic partners.

The company said in a release that it has "faced challenges" despite having its licence to sell and produce cannabis reinstated by Health Canada after regulators discovered it was growing pot illegally in 2018 and 2019.

CannTrust said it is in default of a minimum covenant tied to its earnings before interest, taxes, depreciation, and amortization (EBITDA) under terms of the debtor-in-possession loan it obtained after it was granted creditor protection.

"Despite the implementation of the CCAA Plan, CannTrust's CCAA proceedings are continuing to facilitate further discussions with potential investors and strategic partners, and to develop an orderly wind-down plan to maximize the value of its assets in the event that a financing or strategic transaction option cannot be finalized," the company said in its release.

The company also said it contributed $50 million to a trust established to facilitate several class-action settlements and $2.7 million in a trust tied to claims under its creditor protection proceedings.

CannTrust also announced that its chairman, Robert Marcovitch, as well as directors Mitchell Sanders, Mark Dawber, and Shawna Page have stepped down from its board. It did not announce whether those directors will be replaced.

The developments come years after federal regulators suspended CannTrust's licences after it was found to be growing thousands of kilograms of cannabis in unlicensed rooms at its Fenwick, Ont. facility.

The investigation led to charges being laid against former Chairman Eric Paul, former Director Mark Litwin, and former Chief Executive Officer Peter Aceto. The court proceedings are ongoing.

All of CannTrust’s licences were reinstated by Health Canada in August 2020 following a lengthy rehabilitation process that ensured the company was compliant with regulations.