CannTrust Holdings Inc.'s Danish partner says it has quarantined a batch of products received from the licensed producer in connection with Health Canada's recent discovery of illegal growing operations at its Ontario greenhouse.
CannTrust said yesterday that it was notified by Health Canada that it had found illegal growing in five unlicensed rooms at its greenhouse between October 2018 and March 2019, before receiving the appropriate licences in April 2019. Health Canada has placed a hold on approximately 5,200 kilograms of dried cannabis that was harvested in unlicensed rooms at the Pelham facility, until it deems CannTrust is compliant with regulations.
CannTrust added that Health Canada as a result put 5,200 kilograms of its cannabis on hold and the licensed producer put a voluntary hold on an additional 7,500 kilograms linked to the rooms.
The retailer, Ontario Cannabis Store (OCS), said in an email it had "voluntarily removed all affected products from distribution pending the outcome of an investigation".
Health Canada has given the company 10 days to submit a report about its use of unlicensed facilities.
"Due to the product on hold, some CannTrust customers and patients will experience temporary product shortages", CannTrust said in the statement. TRST stock fell sharply, around 16%, down $1.06, at $5.40 on the Toronto Stock Exchange after falling as low at $5.03 just after the market opened.
CannTrust says that despite the non-compliance, "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".
"At this time, the impact of these matters on CannTrust's financial results are unknown until Health Canada completes its quality testing of product from Pelham which is now on hold".
"We made errors in judgment, but the lessons we have learned here will serve us well moving forward", Aceto said.