Health Canada announced on Monday it had found CannTrust non-compliant for growing in five unlicensed rooms between October 2018 and March. CannTrust is the ninth largest Canadian LP by market cap.

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  • The company also acknowledged in its statement that employees provided inaccurate information to Health Canada.
  • A surprise inspection in June led to the non-compliant finding on July 3. CannTrust has to submit a formal response to Health Canada by July 17 to explain how the unlicensed growing occurred.
  • CannTrust stressed the rooms in question received licenses in April.
  • Health Canada ordered CannTrust to hold back 5,200 kilograms of product grown in the unlicensed rooms at CannTrust’s Pelham facility in Niagara, as well as another 7,500 kilograms grown in the unlicensed rooms and transported to CannTrust’s Vaughan facility.
    Financial Post

The combined 12,700 kilograms is more than the 9,400 kilograms it harvested last quarter, and more than four times as much product as the 3,000 kilograms CannTrust sold. Samples grown in the illicit rooms will be tested by Health Canada in coming weeks.

  • Health Canada would not answer whether cannabis produced in unlicensed rooms qualifies under law as “illicit cannabis,” but it won’t affect consumers who possess the product in question.
    The Leaf
  • A Canaccord Genuity analyst said, “It is highly likely the company will be forced to destroy the product that was produced within the non-compliant grow rooms.”
  • This isn’t the first time CannTrust has caught regulators’ attention. In February 2016, Health Canada seized 377 kilograms of product from CannTrust following numerous violations. Between April 2015 and March 2018, Health Canada made 15 “major” or “critical” observations during CannTrust site inspections.

Quick Hits

  1. Bruce Linton’s non-compete agreement with Canopy means he’ll have to work in the US, but he says cannabis is finished with Canada. He told Bloomberg, “Anybody who’s dumb enough to launch a new cannabis company in Canada, I don’t know what they’re doing, they should have been at it six years ago. Canada is done.”

  2. Canopy is bringing chocolate back to its headquarters in Smith Fall’s, ON’s onetime Hershey factory. This time, the chocolate will be infused, and made in partnership with a local chocolatier.
    CBC Ottawa

  3. WeedWeek founder Alex Halperin got an exclusive interview with Acreage CEO Kevin Murphy.