CannTrust Holdings Inc.’s licenses to create and sell cannabis have been suspended Tuesday by Overall health Canada, the newest setback for the pot firm which has been beneath investigation by regulators for cultivation in unlicensed rooms.
The Vaughan, Ont.-primarily based business mentioned it received a notice of licence suspension from the federal regulator indicating its authority to create 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 regular cultivation and a complete suspension of its licences for regular processing, health-related sales, cannabis drugs and analysis.
“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, such as drying, trimming and milling,” the business mentioned in a release. “During the suspension, CannTrust may perhaps 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 pages.
“Under the terms of the suspension, CannTrust Inc. is permitted to take important actions to keep the viability and good quality of cannabis plants and cannabis items whilst Overall health Canada testimonials any representations from the licence holder,” a division spokeswoman wrote in an e mail.
It mentioned the business may perhaps respond to the notification inside 10 business enterprise days to clarify why the suspension is unfounded or facts that Overall health Canada really should 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 obtainable. Overall health Canada may perhaps also decide that extra compliance and enforcement actions are warranted.”
Back in July, CannTrust disclosed the federal regulator’s findings that the business was expanding 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 items 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 items.
CannTrust later voluntarily halted all sales and shipments of cannabis as Overall health Canada continued its probe into the matter.
In late July, the business terminated its chief executive Peter Aceto “with cause” and asked its chairman Eric Paul to resign following the board found new facts through an internal investigation into the alleged unlicensed pot expanding. It also in July hired a monetary adviser to assistance discover a possible sale and other strategic options for the business.
Final month, CannTrust mentioned its Vaughan, Ont.-primarily based facility was also located 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 expanding 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 business enterprise.”
CannTrust’s shares have lost far more 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 practically 15 per cent.
Immediately after getting halted for pending news on Tuesday, the stock slipped 14.57 per cent from its prior close of $1.99, to reach $1.70. That marks a practically 74 per cent drop from its closing value 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 business 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 handle the movement in and out of the company’s web page, to enhance important personnel’s know-how of and compliance with regulations, and a program to enhance inventory tracking, the business mentioned.
“Over the previous two months, the business has moved swiftly to assess and address Overall health Canada’s issues, such as regions of operational non-compliance,” it mentioned in the release. “The business remains committed to getting in complete regulatory compliance.”
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Armina Ligaya, The Canadian Press