Nobody You CannTrust: Timeline of Troubles LP

Article by Mike O, Cannabis Life Network


CannTrust is the latest licensed producer to be found breaking the law by growing cannabis in unlicensed rooms. Because of that, CannTrust is facing a situation where they could lose their license, be fined up to a million dollars, cease existing as a company, have employees sent to prison, or all of the above.

You can bet that CannTrust executives are praying for only the fine because although that would be bad, losing their license would be catastrophic and would be an existential threat for the company going forward.

This article traces the CannTrust timeline in reverse chronological order.

July 22

CannTrust officially confirms that it responded to Health Canada finding 12,700 kg of illegally grown cannabis at an unlicensed greenhouse on July 17, which was one day before the July 18 deadline imposed by Health Canada, as reported by the Canadian Press.

Robert Markovitch, the chairman of the special committee created by CannTrust to investigate the situation, said:

“We are determined to identify the root causes for all non-compliance issues, to take appropriate actions to address and remediate any issues with the Company’s compliance culture and to restore trust in the Company.”

July 18

BNN Bloomberg reports “at least two Canadian cannabis producers have been approached by bankers to gauge interest in acquiring CannTrust”, but this is in the very early stages and according to sources, it’s nowhere close to a deal.

July 15

Agrima Botanicals becomes the first licensed producer to have their cannabis licenses revoked by Health Canada, as reported by CBC.

Although not directly related to the CannTrust saga, Agrima’s case can serve as a warning sign that CannTrust could meet the same fate.

July 11

CannTrust announces it is placing a voluntary hold on all sale and shipping of its cannabis.

Law firm Kaplan Fox files a class action lawsuit against CannTrust “on behalf… of all persons and entities who purchased the publicly traded common stock of CannTrust on the New York Stock Exchange”.

July 10

New York law firm  Bragar Eagel and Squire, a New York-based law firm that specializes in securities litigation, announced that it has begun investigating the company for the violation of federal securities law and other unlawful business practices

July 8

CannTrust receives a notice of non-compliance over cannabis grown in five unlicensed rooms between October 2018 to March 2019.

Due to this noncompliance, Health Canada has placed 5,200 kg of cannabis on hold, with CannTrust holding another 7,500 kg of cannabis voluntarily, for a total of 12,700 kg.

As reported by CTV, this is the “majority” of the company’s inventory, meaning cannabis shortages are all but guaranteed, and it’s significantly more than the 9,400 kg of cannabis the company grew in the last financial quarter.

Read the full article here.

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