Canadian securities regulators halted the trading of iAnthus stock for nearly four hours Wednesday as they sought information from the multistate cannabis operator about reports related to its difficult financial situation.
In a news release, New York-based iAnthus attributed the trading suspension on the Canadian Securities Exchange to a request for information about online “speculative” reports about the company considering strategic alternatives.
The company recently defaulted on interest payments and said it was investigating possible conflicts of interest involving CEO Hadley Ford.
The Investment Industry Regulatory Organization of Canada (IIROC) halted iAnthus trading on the CSE at 10:33 AM ET on Wednesday and lifted the suspension at 2:15 PM ET.
The company’s shares continued to trade Wednesday on the U.S. over-the-counter markets as ITHUF.
While partly blaming the coronavirus outbreak, iAnthus said earlier this month that it was unable to pay interest obligations of $4.4 million on $157.5 million in debt. The company operates 31 dispensaries in 11 states.
In the same announcement, iAnthus said it had formed a committee to oversee strategic alternatives and to investigate Ford. The possible conflicts of interest involving Ford weren’t disclosed.
The announcement earlier this month has triggered several lawsuits in recent days by law firms seeking to develop class action shareholder securities fraud claims against iAnthus.
The lawsuits allege that iAnthus made false and misleading statements and/or failed to disclose material adverse information in the months leading to the interest payment default
The suits note that iAnthus shares fell 62% on heavy trading volume on the news of the default and internal investigation of the company’s CEO.
Spokeswoman Carrie Booze referred to Wednesday’s news release but didn’t immediately comment on the litigation.
The company said earlier this month it will delay announcing its quarterly earnings results.