In an interview with The Globe and Mail (subscribers only), Patricia Olasker commented on the impact of Health Canada’s investigation into CannTrust for regulatory non-compliance as a result of cultivating cannabis in unlicensed rooms.

“Any lawyer you talk to will say they have a number of deals that could be impacted by this,” said Patricia. “We advise U.S. banks … in this space, those who are in deals and those who are thinking about getting into deals, and the top-of-mind issue for them is always legal compliance.”

Patricia observed that, while the allegations created a downdraft for the whole cannabis market, Health Canada’s swift response is a positive step toward winning back investor confidence.

She concludes that one could view this situation as a “stern warning to other producers: Comply or risk a beating in the stock market. That might make the next guy less prepared to pull plywood walls over illegal grow operations.”