Health Canada is leaving CannTrust Holdings Inc. (TRST.TO) in the dark about the timing and extent of any enforcement action stemming from the company's illegal production scandal, according to an update late Thursday that documented potential fallout from any future decisions by the regulator.

CannTrust has been stuck in a state of turmoil since July 8 when it first disclosed it had run afoul of Health Canada as a result of grow operations in unlicensed rooms at its facility in Pelham, Ont. Since then, it fired its CEO, pushed out its co-founder and chairman, suspended all sales and shipments, launched a review of strategic options, received a second non-compliant report from the regulator, disclosed an investigation by the Ontario Securities Commission's Joint Serious Offences Team, and missed the deadline to file its financial results for the three-and six-month periods ending June 30.

In its update late Thursday, the company said it "has not had any substantive discussions with Health Canada" on its remediation efforts, and reiterated that the regulator isn't able to deliver a timeline for its eventual decisions. Health Canada's enforcement powers allow it a wide range of potential options, including a $1-million fine and the suspension or revocation of CannTrust's licences.

As a result of CannTrust's initial regulatory infraction, 12,700 kilograms of dried cannabis and equivalent has been placed on hold. In its update Thursday, the company said the affected assets represent 53 per cent of its total inventory and warned its financial results could be "materially adversely impacted" if Health Canada mandates the destruction of some or all of the product grown in unlicensed rooms. As of June 30, the producer had $250 million in cash and equivalents on hand.

CannTrust also said the New York Stock Exchange has warned it will "closely monitor" the company's filings and could ultimately decide to suspend or de-list its securities "depending upon the circumstances."

Despite the warnings in CannTrust’s update, its shares rallied in New York in early trading Friday.

“The issue at hand is, can we try to forecast what ends up happening from the regulatory side? … It really is a roll of the dice,” said Jeff Weniger, director of asset allocation at WisdomTree Asset Management, in a conversation with BNN Bloomberg.

“And so people need to realize that if you have your investing money and then you have your play money, this is what the cannabis industry is in 2019.”

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