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CannTrust Halts Sales as Health Canada Investigation Expands

July 12, 2019
CannTrust/Facebook
Patients of licensed producer CannTrust might have been mistaken if they thought their computer was glitching starting Wednesday night. Logging into the company’s online shopping portal brought up a blank screen instead of the dozens of cannabis products patients typically have access to.

And if patients were to call the toll-free number listed on the page, they would find out from a customer service representative that the company had placed some sort of hold on all sales of cannabis from the company’s warehouse to medical patients and provincially-authorized recreational distributors.

That followed a bombshell earlier this week. As first reported by the Globe and Mail, a former employee of CannTrust that worked in the company’s Pelham, Ontario facility wrote a letter to Health Canada indicating that the company was growing in unlicensed rooms and that employees at the company had moved white poly sheets around to make it seem as the unlicensed rooms were empty.

Two days later, Health Canada showed up to the facility, and has been investigating the situation ever since.

On Wednesday, the company told media that it had grown approximately 5,000 kilograms in unlicensed rooms from October 2018 to March 2019. There were reports that some of the cannabis had already been sold to provinces and provincially-authorized distributors.

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CannTrust then announced on Thursday it would form an independent special committee to investigate the entire situation.

It took another handful of hours—11:32 p.m. on Thursday night, to be exact—before CannTrust sent an email to patients explaining the situation.

“We are currently working on a facility review with Health Canada and as a precaution, we have implemented a voluntary hold on the sale of our medical products as of July 10th, 2019,” the message from CEO Peter Aceto read.

The email didn’t mention unlicensed rooms or the events that led up to the voluntary hold but it did say that all products sold had passed quality control testing at Health Canada approved lab’s “as well as CannTrust’s own quality control processes and safety reviews.”

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At least one store, AMERI in downtown Toronto, said on Thursday that while its stock of Liiv products is low, they still have some remaining.

CannTrust’s stock has also took a tumble. It was as high as $13.45 at the end of March 2019, but had since declined to around $6.50 at the beginning of July. When the news broke a few days later, the stock plummeted and went as low as $3.52 midday Friday.

CannTrust is not the first licensed producer of cannabis to be in hot water over the production or sales of illicit cannabis.

Bonify had their license suspended late last year after they admitted that someone at the company had purchased illegal cannabis and later resold it. Similarly, Health Canada in late 2017 threatened to revoke the license of Agrima Botanicals, which reportedly had conducted illicit production of cannabis.

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It’s not yet known how long this hold will be in place. As required under the Cannabis Regulations, CannTrust is facilitating the transfer of medical documents to other federally-licensed sellers in the event patients registered with them would like to switch to another provider.

Harrison Jordan's Bio Image

Harrison Jordan

Harrison Jordan is a graduate of Osgoode Hall Law School in Toronto and enjoys reading and writing about the regulatory affairs of cannabis in Canada and around the world.

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