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Home / Business / CannTrust's story of violations appears when stock tumbles – Article

CannTrust's story of violations appears when stock tumbles – Article



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Health Canada took hundreds of pounds of cannabis from CannTrust Holdings Inc. ( TRST.TO ) after an inspection three years ago, and demonstrated a history of mismatch from a company that has been Pulled into the limelight this week for a bug that could cost Vaughan, Ont. its license to produce and sell cannabis in Canada.

The attack in February 2016 was due to one of a number of violations that Health Canada proved to have taken place over the past four years, according to a review of inspection findings described by the federal regulator. From April 201

5 to March 2018, there were 15 important or critical observations from Health Canada on-site inspections at CannTrust sites.

The seizure of more than 377 kilos of pot took place after a targeted review by federal inspectors who found the company stored four times more cannabis in a security vault than it was licensed to hold, resulting in about $ 6 million of medical pot. was taken away by Health Canada.

"There have been some compliance issues previously with CannTrust," said Sherry Boodram, CEO of regulatory consulting firm CannDelta and a former enforcement officer with Health Canada, in an interview with BNN Bloomberg. "There are things Health Canada will take into account when trying to make a decision on enforcement."

Shares in CannTrust have lost about 40 percent of the value since entering a tailspin Monday when the company revealed that Health Canada decided to grow thousands of cannabis in unlicensed rooms at Pelham, Ont. The facility between October 2018 and March this year.

And late Wednesday, The Globe and Mail quoted a former CannTrust employee claiming that the company's employees installed false walls on the site to hide illegally grown cannabis to avoid detection during Health Canada inspections.

"It is clear that the main problem among investors at this time is whether Health Canada will look to set an example out of CannTrust and potentially pull the company's production license," said Derek Dley, an analyst with Canaccord Genuity, who slashed his price target on CannTrust's stock at $ 5 per share from $ 12 in a report on Thursday. "While we had originally seen this as very unlikely, we are now aware that this may be within the capabilities."

As a result of Health Canada's recent inspection, the regulator placed about 5,200 kilograms of cannabis in wait while the Company voluntarily placed an additional 7,500 kilograms produced on its Vaughan, Ont. the plant on hold until the survey is completed.

On the basis of BNN Bloomberg's review of an online inspection database, some of the other violations were found to be in violation of between 2015 and 2018, including storage vault security issues, growth room molds, and the absence of a traceability system needed to ensuring that the illegal pot was not sent to medical patients, a source who was directly familiar with the case said.

All problems were later addressed by the company under Health Canada's guidance, the source added. "width =" 5000 "class =" poll-image "src =" http://www.bnnbloomberg.ca/polopoly_fs/1.1285849.1562861309!/fileimage/httpImage/image.jpg_gen/derivatives/default/marijuana.jpg "/ >

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A CannTrust spokesman confirmed in a message sent to BNN Bloomberg that" Mistakes were made "and the company cooperates with Health Canada for to solve problems with compliance with new processes and a corporate training program.

"We have implemented a number of corrective actions, including holding external advisors for an independent review of compliance processes and procedures, and we have strengthened our quality and compliance department through the employment of an experienced vice president of quality and employment and training. of another 17 quality and compliance professionals, the spokesman said in a statement. 19659003] CannTrust has until July 18 to respond to Health Canada's recent audit report, after which Health Canada will review the information provided by the company and determine any appropriate enforcement. It can range from a letter of notice, to a fine of up to $ 1 million, or revocation of the company's license to grow and sell legal cannabis.

"Again, as CannTrust announced earlier this week, we owe our full answer on Health Canada regarding specific details and responsibilities. It's the way back to compliance. Until that time, we cannot comment on specific details, says the spokesman.

Cannabis Canada is the BNN Bloomberg's depth series that explores the stunning formation of the all-new and controversial Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to get the latest marijuana news delivered directly to your inbox every day.


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