An unpopular stock in an unpopular sector, Sundial Growers (SNDL 1.58%) took a fresh share price hit on Monday. During an otherwise good day for the market, the Canadian marijuana company's stock fell by 4% on news that a voluntary ban on share trading by top managers has been accepted by a regulator.
On Friday night, Sundial announced that the Alberta Securities Commission -- its principal regulator -- had granted the company a management cease trade order, or MCTO. That was a fairly quick response, as Sundial announced at the end of March that it had submitted its application for the order.
The MCTO restricts the CEO and CFO from any trading in Sundial securities until the company files audited, consolidated financial statements for 2021. The cannabis company previously said it expected a delay in submitting that documentation.
Sundial wrote in its announcement that it aims to "continue to work diligently toward completing the Filings as soon as possible." It plans to do so on or before April 14.
Sundial seems to be ticking the correct regulatory boxes regarding the delayed 2021 filing. Still, it's never an encouraging sign when a company -- voluntarily or otherwise -- has some of its top managers barred from trading in its stock.
This move added to investors' general worries about Sundial's business. Like many other marijuana companies, it is usually -- and at times, deeply -- unprofitable. And although it recently closed its potentially quite complimentary purchase of cannabis and alcohol retailer Alcanna, Sundial has not yet proven that it can effectively swallow an acquisition of that size.