2nd CannTrust marijuana facility deemed non-compliant by Health Canada

Cornelia Mascio
Agosto 13, 2019

CannTrust said it was notified on Friday, and has accepted the Canadian health regulator's findings. The inspection found that five rooms converted from operational areas were being used for storage without approval, and that two new areas were constructed for storage that were also not approved.

Health Canada's probe could result in the suspension or termination of CannTrust's cannabis licences and fines up to $1 million.

Since Health Canada found the unlicensed pot cultivation, CannTrust fired Peter Aceto as chief executive officer, while Eric Paul resigned as chairman.

The Ontario Securities Commission said earlier in the month it had launched a joint investigation with the RCMP to examine unlicensed growing at CannTrust's greenhouse.

Along with its licence, the fate of CannTrust's inventory is up in the air.

The stock was trading down 23 per cent to $3.25 at 9:43 a.m.in Toronto, following a sudden 40 per cent jump at the close of trading on Friday.

Although the Company, under the supervision of the Special Committee, is preparing a remediation plan for submission to and consideration by Health Canada, Health Canada has advised the Company that it is now unable to provide any guidance about the timing or content of its decisions concerning the Company.

Its the second recent instance where CannTrust was found by Health Canada to be operating in non-compliant facilities. "I would not be surprised if HC visits Vaughan in the near future and that could compound HC's concerns", Mr.

"PA2A-E are not licenced but we have moved the encapsulation equipment into them and will begin running it next week; PA5 has been modified and is not approved for storage but we are storing product in it", Mr. Health Canada has said that it is now unable to provide any guidance about the timing or content of its decisions regarding CannTrust. The Company operates its Niagara Perpetual Harvest Facility in Pelham, Ontario, and prepares and packages its product portfolio at its manufacturing centre in Vaughan, Ontario.

The 60,000-square-foot Vaughan manufacturing facility was originally CannTrust's main growing facility, but has been largely repurposed into lab space for cannabis oil extraction and warehouse space for packaging.

The fall in CannTrust's share price on Monday comes after a almost 40 per cent spike in the last hour of trading on Friday.

Documents or information that were not retained in a manner to enable Health Canada to complete its audit in a timely manner.

The company's interim CEO Robert Marcovitch said, "We are continuing to work hard to regain the trust of Health Canada, our patients, shareholders, and partners".

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