CannTrust Holdings Inc CNTTQ

RE:RE:RE:Happy with Q1 - 2019 Canntrust results?

[Analystguy]

I am happy that they showed a profit but am bothered about a few things.

1. Gross profit was determined in large part due to the value of the Biological Assets harvested. These have yet to sell. Remember last quarter TRST took a large unexpected charge against Biological Assets that resulted in negative Gross Revenue. To me this introduces a $26 million fudge factor into the quarters results.
2. It costs TRST more to make extracts yet the revenue per gram equivalent is less than dry bud.
3. Sales for Medical and Recreational products are declining quarter over quarter.
4. Company has more than doubled shareholder compensation quarter over quarter despite lower sales volumes.
5. Adjusted Gross margin revenues before fair market adjustments is only about 32% of company expense. If you had to spend $1 to make .32 cents you will need to borrow money to stay in business. They are doing so by issuing more shares.

I know these financials are typical of those in the industry, they are bitter sweet in that I don;t see any underlying quarter of quarter improvement.