Home / Business / The CannTrust Crime Story Reveals As The Stock Crumbles – Article

The CannTrust Crime Story Reveals As The Stock Crumbles – Article

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Health Canada seized hundreds of kilograms of cannabis from CannTrust Holdings Inc. (TRST.TO) following an inspection conducted three years ago, highlighting a history of compliance failures by a company that was put in the spotlight this week for a fault that could be costly to the company based in Vaughan, Ontario, its authorization to produce and sell cannabis in Canada.

The February 2016 seizure results from a series of infractions found by Health Canada over the last four years, according to a review of the inspection findings detailed by the federal regulator. From April 2015 to March 2018, Health Canada made 15 critical or critical observations during site inspections at CannTrust sites.

This seizure of more than 377 kilograms of jar took place as a result of a targeted review by federal inspectors who discovered that the company had stored four times more cannabis in a safe than the one that ## 147 ##################################################################### She was allowed to keep, which resulted in the removal of about $ 6 million of medical pot. by Health Canada.

"There have been some compliance issues with CannTrust," said Sherry Boodram, general manager of CannDelta's regulatory consulting firm and former authority officer at Health Canada, in an interview with BNN Bloomberg. . "These are things that Health Canada will consider when trying to make an enforcement decision."

CannTrust's shares have lost approximately 40% of their value since the company disclosed that Health Canada had determined that it was producing thousands of kilograms of cannabis in unlicensed rooms in Pelham, Ontario. between October 2018 and March of this year.

On Wednesday night, the Globe and Mail quoted a former CannTrust employee as alleged that company staff had installed false walls to conceal illegally grown cannabis to avoid detection during Health Canada inspections.

"Clearly, the primary concern of investors at this stage is whether Health Canada will seek to give CannTrust the example and potentially attract the company's production license," said Derek Dley, Canaccord Genuity analyst, which has reduced its price target on CannTrust stock to $ 5 per share from $ 12 in a report on Thursday. "While initially considered this highly improbable, we now recognize that this might be possible."

Following the recent inspection by Health Canada, the regulator suspended approximately 5,200 kilograms of cannabis, while the company voluntarily placed an additional 7,500 kilograms of product at its Vaughan, Ontario facility. installation pending until the close of the investigation.

According to the analysis by BNN Bloomberg of an online inspection database, some of the offenses whose business was found to have committed an infringement between 2015 and 2018 include security concerns related to storage safes, mold in growing rooms and the lack of traceability system ensure that the illicit pot has not been shipped to patients, said a source directly aware.

The issues were then handled by the company under the direction of Health Canada, the source added.

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A CannTrust spokesperson acknowledged in an e-mailed statement to BNN Bloomberg that "mistakes had been made" and that the company was working with Health Canada to resolve its compliance issues with new processes and a conversion program. the scale of society.

"We implemented a number of corrective actions, including the use of external consultants for independent review of compliance processes and procedures, and strengthened our quality and compliance service through hiring. an experienced vice president of quality, as well as the recruitment and training of a further 17 quality and compliance professionals, "said the spokesman in a statement.

CannTrust has until July 18 to respond to Health Canada's recent inspection report for non-compliance. Thereafter, Health Canada will review the information provided by the company and determine the appropriate enforcement actions. This could range from a warning letter to a fine of up to $ 1 million, or the revocation of the company's license to legally cultivate and sell cannabis.

"Once again, as CannTrust announced earlier this week, we owe our full response to Health Canada for specific details and accountability. This is the path to compliance. Until then, we are not able to comment on certain details, "said the spokesman.

Cannabis Canada is a detailed series of BNN Bloomberg that explores the amazing formation of the Canadian recreational marijuana industry, which is entirely new and controversial. Read more about the special series here and subscribe to our Cannabis Canada newsletter to receive the latest marijuana news directly in your inbox.

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