Second CannTrust facility in the weeds

August 13, 2019
Written by Greenhouse Canada
CannTrust’s manufacturing facility in Vaughan, Ont. has been deemed non-compliant by Health Canada.

According to the licensed producer’s release, Health Canada’s inspection in July found a number of infractions.

Without prior approval from Health Canada, five rooms were converted from operational areas to storage areas in June 2018, and two new areas were constructed, one of which has been used to store cannabis since November 2018. Other items of note included insufficient security and quality controls, non-compliant operating procedures, and “documents or information that were not retained in a manner to enable Health Canada to complete its audit in a timely manner,”

Last month, Health Canada found five unlicensed grow rooms at CannTrust’s greenhouse facility in Pelham, Ont. CannTrust’s CEO was fired, and their board chair was asked to resign in the weeks that followed. The company placed a voluntary hold on the sale and shipment of all cannabis products. The value of the impacted assets was estimated at $51 million as of June 2019.

As CBC News reports, CannTrust’s shares on the Toronto Stock Exchange declined by a quarter of their value on Monday, closing at $3.04. Shares were reportedly worth over $15 each when recreational cannabis use was legalized last fall, but have experienced a slow decline in value since.

“We are continuing to work hard to regain the trust of Health Canada, our patients, shareholders and partners,” says CannTrust CEO Robert Marcovitch. “We have retained independent consultants who have already started addressing some of the deficiencies noted in Health Canada's report. We are looking at the root causes of these issues and will take whatever remedial steps are necessary to bring the company into full regulatory compliance as quickly as possible."

According to CannTrust, Health Canada has advised that it is currently unable to provide any guidance about the timing or content of its decisions regarding the company.

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