Creative Edge Nutrition, Inc. (OTCMKTS:FITX) Scrambles to a Green Close

Friday looked like it would be another bloodbath for Creative Edge Nutrition, Inc. (OTCMKTS:FITX). The company’s share price took a nose dive right after the opening bell, dipping 30% in the first hour of trading on massive volume. Recovery was slow to come but by the closing bell FITX managed to dig itself out and closed 4% in the green.

The devastating morning dump did give shorters and aggressive day traders an ample opportunity to make money but the stock averted a dangerous excursion into sub-penny territory. Long investors on the other hand have little to cheer for, as FITX is still about 55% down in just three sessions.

The commotion that sent the share price tumbling was caused by the town council of the city of Lakeshore, where FITX constructed its facility intended to grow marijuana, hopefully under a future Health Canada MMPR license. Lakeshore amended its zoning bylaws for marijuana facilities, which now cannot be built on land zoned for agricultural purposes. The amendment will have to be approved by the upper tier authority – the county of Essex but it was still bad news for FITX.

The company released a letter to shareholders Wednesday evening, trying to calm the spirits but the genie was out of the bottle already and with FITX down in double digits in he day’s session. The letter to shareholders also contains one controversial statement. FITX claims that the change in bylaws does not affect the company’s current facility. However, the official council decision published on the homepage of the town of Lakeshore explicitly states that the facility is ‘not grandfathered’, meaning the new rules will not make an exception for it, leaving investors wondering which of the two statements is true.

It remains to be seen which way FITX goes from its current position. Company representatives have voiced their readiness to move the facility altogether, likely to Tecumseh – another town in Essex county. Seeing how long FITX took to construct its current facility and how long Health Canada is taking to move any of the paperwork along, much less issue an actual license, investors might be in for a long wait.