The Day ASNT Lost 54%
In December, Ascent Industries (ASNT) got into some trouble with its Canadian operations for violating Health Canada’s licensing standards.
According to a press release put out by the company today the company has had its licensed suspended for not following proper protocol. (Agrima refers to their subsidiary company based out of Maple Ridge, BC)
“Health Canada has advised the responses were not satisfactory to lift the suspension and has issued a letter to Ascent that it intends to revoke Agrima’s licences. In turn, the Company intends to exercise its right to be heard under the Cannabis Act and Cannabis Regulations in order to maintain its licences. Should the Company not be successful in this hearing process, the licences could be revoked.”
Later that month we wondered if the stock could be a buy as the company still had a strong portfolio of US operations, including licensing agreements in Europe.
At the time of the article the company had $0.21 share price with a market cap of only $66.1 million, and a price/book of only 2.7. The company does suffer from moderate-heavy dilution with 314,574,566 shares outstanding, meaning it may take a lot for this stock to move.
Needless to say, things aren’t looking good.
The Worst Could Come True
But, it looks like the worst could unfold for the company and its investors. Today the company has put out another press release, and this one could have even worse implications.
Ascent wishes to advise that Sweet Cannabis (“SC”), the Company’s wholly-owned subsidiary operating in Las Vegas, Nevada has received notice from Clark County’s Department of Business License , of the potential suspension, revocation or non-renewal of SC’s Master Marijuana License in Clark County, Nevada.
The Department advised that through an investigation, SC was found to have been operating outside the scope of the License. The Department noted three specific violations:
- An SC hosted cannabis consumption event in the H-1 Zone Resort Corridor in Las Vegas
- Record keeping and inventory errors
- Parent company license suspension by Health Canada
SC has been advised that it must appear before a Hearing Officer on February 28, 2019 to show cause why the License shall not be permanently suspended, revoked or non-renewed. Should the Department not be satisfied with SC’s responses, it may suspend, revoke or not renew the License. SC has a right of appeal of such a decision and may also file a petition for a judicial review conducted by the District Court. Ascent is fully committed to addressing the Department’s concerns, and will appear and provide appropriate information to the Department at the February 28, 2019 hearing. The Company notes that the consumption event appears to have taken place on November 15, 2018 under the former management team of Ascent, who resigned on November 21, 2018, and is reviewing the matter.
Ascent will provide further updates as they become available.