CannTrust Holdings Inc.’s licenses to make and sell cannabis have been suspended Tuesday by Overall health Canada, the newest setback for the pot firm which has been below investigation by regulators for cultivation in unlicensed rooms.
The Vaughan, Ont.-primarily based firm mentioned it received a notice of licence suspension from the federal regulator indicating its authority to make cannabis, other than cultivating and harvesting, and to sell cannabis have been suspended.
It adds that the notice cites CannTrust‘s “previous non-compliance with specific specifications of the Cannabis Act.”
CannTrust mentioned it is facing a partial suspension of its licences for normal cultivation and a complete suspension of its licences for normal processing, healthcare sales, cannabis drugs and study.
“While the suspension remains in impact, CannTrust will be permitted to cultivate and harvest current lots or batches previously propagated, as nicely as conducting ancillary activities to these lots, like drying, trimming and milling,” the firm mentioned in a release. “During the suspension, CannTrust may possibly not propagate new lots or batches of cannabis or engage in the sale or distribution of cannabis.”
Overall health Canada mentioned in addition to delivering notices of suspension to CannTrust on Tuesday, inspectors have been “seizing and detaining all cannabis products” at the Vaughan and Pelham web sites.
“Under the terms of the suspension, CannTrust Inc. is permitted to take required actions to retain the viability and high quality of cannabis plants and cannabis goods though Overall health Canada testimonials any representations from the licence holder,” a division spokeswoman wrote in an e mail.
It mentioned the firm may possibly respond to the notification inside 10 organization days to clarify why the suspension is unfounded or facts that Overall health Canada need to take into consideration in its choice-creating.
“Health Canada will continue to closely monitor actions taken by CannTrust Inc. and will re-assess the status of the company’s licence as new facts becomes readily available. Overall health Canada may possibly also figure out that extra compliance and enforcement actions are warranted.”
Back in July, CannTrust disclosed the federal regulator’s findings that the firm was increasing pot in quite a few rooms at its greenhouse in Pelham, Ont., prior to getting the acceptable licences from the government.
Overall health Canada has not issued a recall on CannTrust’s goods but placed a hold on roughly five,200 kilograms of dried cannabis and CannTrust place a voluntary hold on roughly 7,500 kilograms of cannabis goods.
CannTrust later voluntarily halted all sales and shipments of cannabis as Overall health Canada continued its probe into the matter.
In late July, the firm terminated its chief executive Peter Aceto “with cause” and asked its chairman Eric Paul to resign right after the board found new facts in the course of an internal investigation into the alleged unlicensed pot increasing. It also in July hired a economic adviser to enable discover a prospective sale and other strategic options for the firm.
Final month, CannTrust mentioned its Vaughan, Ont.-primarily based facility was also identified to not be in compliance by regulators. Also in August, the company disclosed that the Ontario Securities Commission had opened an investigation into the concerns about the alleged unlicensed increasing at its Pelham greenhouse.
Earlier this month, CannTrust announced it was laying off about 180 men and women or roughly 20 per cent of the company’s workforce to “reflect the present specifications of our organization.”
CannTrust’s shares have lost additional than 70 per cent of their value since it first disclosed Overall health Canada’s findings on July eight, and Tuesday’s announcement sent its shares down almost 15 per cent.
Right after getting halted for pending news on Tuesday, the stock slipped 14.57 per cent from its preceding close of $1.99, to reach $1.70. That marks a almost 74 per cent drop from its closing cost on July five of $six.46.
CannTrust mentioned on Tuesday that the company’s management and board of directors are reviewing the notice from regulators with its counsel and other advisers.
CannTrust added that the notice from Overall health Canada outlined quite a few measures the firm could take to address the “public wellness and security risks” that contributed to its choice. These incorporated measures to recover cannabis that was not authorized by CannTrust’s licence, to manage the movement in and out of the company’s web site, to strengthen essential personnel’s understanding of and compliance with regulations, and a strategy to strengthen inventory tracking, the firm mentioned.
“Over the previous two months, the firm has moved swiftly to assess and address Overall health Canada’s issues, like regions of operational non-compliance,” it mentioned in the release. “The firm remains committed to getting in complete regulatory compliance.”
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Armina Ligaya, The Canadian Press