CannTrust’s cannabis sales put on hold by Health Canada for unlicensed growing

A Canadian cannabis company has been found non-compliant by Health Canada for growing pot in greenhouse rooms that didn’t have a licence to operate at the time.

Vaughan, Ont.-based CannTrust grows much of its product at a large greenhouse operation in Pelham, Ont., near Niagara Falls. The facility has 12 rooms, all of which are currently licensed to produce cannabis. Between October 2018 and March 2019, however, Health Canada says the company was growing marijuana in five rooms that had yet to obtain an official licence to do so.

“These rooms were constructed in accordance with regulations and good production practices, and licences were issued for each of the five rooms in April 2019,” the company said.

Some CannTrust employees also provided inaccurate information to the regulator, the federal department said.

As a result, Health Canada has put a hold on roughly 5,200 kg of dried cannabis that was cultivated in those five rooms during the period in question until it deems the company has complied with regulations.

Conducting quality checks

In addition, CannTrust says it is voluntarily putting a hold on about 7,500 kg of dried pot that it says was previously manufactured in those rooms.

Health Canada is in the process of conducting quality checks on the company’s products, which is expected to take up to two weeks to complete. As a result, CannTrust says its customers should expect some delays.

“All product sold from the impacted rooms has passed quality control testing at Health Canada certified labs as well as CannTrust’s own quality control processes and safety reviews,” CannTrust said.

“We have made many changes to make this right with Health Canada,” CannTrust chief executive Peter Aceto said in a release. “We made errors in judgment, but the lessons we have learned here will serve us well moving forward.”

Shares in CannTrust plunged as much as 20 per cent on the TSX on Monday morning, to just above $5 a share — their lowest level since 2017.