Article by Vanmala Subramaniam, Financial Post
Some of the cannabis grown by CannTrust Holdings Inc. in unlicensed rooms at its Niagara facility has already been shipped to provinces across the country, the company’s chief executive officer, Peter Aceto, confirmed on Monday.
The acknowledgment in an interview with the Financial Post came after CannTrust revealed Monday that Health Canada had put a freeze on more than 5,000 kg of marijuana at its Pelham, Ont., plant after finding it had been grown in five unlicensed rooms. The company’s stock closed down more than 20 per cent in Toronto following the announcement.
It is unclear when the unlicensed product was packaged and shipped to the provinces, or whether the product in question had been sold to Canadian consumers.
“Some of that product has left. We feel confident in its quality and safety because it has gone through testing in Health Canada-sponsored third party labs, as well as our own quality testing. But yes, some product has definitely been released to the provinces,” Aceto said.
He added that the company has been corresponding with the provinces regarding the product grown in unlicensed rooms, and would continue to have an “open dialogue” with them. Aceto would not confirm which provinces the cannabis had been shipped to, but the company has supply agreements with all provinces.
Over the weekend, Health Canada placed a hold on 5,200 kilograms of dried cannabis at CannTrust’s Pelham facility because it had cultivated cannabis in rooms not yet licensed by the department between October 2018 and March 2019. The five rooms in question received their Health Canada cultivation licence in April 2019.
The company also placed a voluntary hold on an additional 7,500 kilograms of dried cannabis equivalent grown in “previously unlicensed rooms” at its Vaughan, Ont., indoor facility.
“We believe it is highly likely the company will be forced to destroy the product that was produced within the non-compliant grow rooms,” wrote Canaccord Genuity Corp. analyst Derek Dley in a note.