The Cann Group Ltd (ASX: CAN) share price is holding its ground today despite announcing a product recall from one of its customers.
During late afternoon trade, the cannabis company's shares are fetching for 48.5 cents, up 1%. At one point, Cann shares reached an intraday high of 51 cents, before heading lower.
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What happened?
Investors appear unfazed by the company's latest announcement, keeping Cann shares in the green today.
Cann advised that one of its customers has commenced a class III recall for its 50ml medicinal cannabis oil products.
According to the Australian Therapeutic Goods Administration, a class III product recall is defined as follows:
Class III – Lowest risk – recall action occurs when the use of, or exposure to, the deficient therapeutic good(s) is not likely to cause adverse health consequences and they are therefore not safety-related.
Cann stated that 250 units of the recalled products were recently released to the Australian market. It noted that 11 units have been given to patients, with the remaining units being held by the customer's distributor.
The products were manufactured and released by an approved third-party GMP licenced manufacturer, using ingredients from another third-party. Cann explained that the recall follows a similar batch of the product in which was notified by the manufacturer.
The sponsor of the product in Australia (the customer's distributor) is currently in discussions with the TGA to coordinate the recall. Cann said that it's working with the affected supply chain, and the customer to identify the cause of the issue.
About the Cann share price
Over the last 12 months, the Cann share price has almost halved in value, dragging down shareholder gains. Year-to-date has fared no better with the company's shares down close to 20%.
On valuation grounds, Cann presides a market capitalisation of around $134 million, with roughly 277.8 million shares outstanding.
