The auditor for Canadian cannabis company CannTrust Holdings, Inc., KPMG, is withdrawing its audits of CannTrust’s financial statements after Health Canada ordered it to hold more than 5,000 kilograms of inventory last month, according to a MarketWatch report. The auditing firm says CannTrust statements for 2018 and this year’s first quarter cannot be relied on.
Health Canada determined that the company had harvested plants from an unlicensed greenhouse which led to the hold and CannTrust followed suit and placed a voluntary hold 7,500 kilograms of flower. Danish medical cannabis company Stenocare also quarantined five batches of CannTrust oil after the Health Canada ruling as it launched its own investigation into whether its products imported from CannTrust had been grown in the illegal rooms. Stenocare later confirmed it had received some of the illegally-grown cannabis.
On July 25, CannTrust announced Chief Executive Peter Aceto had been fired for cause and President Eric Paul was forced out after the Globe and Mail published emails showing top CannTrust officials knew about the illegal grows.
“KPMG was not aware of the information recently shared by the Company when it issued the KPMG Reports and had relied upon representations made by individuals who are no longer at the Company.” – KPMG, in a statement via Marketwatch
Robert Marcovitch, who replaced Aceto as CEO said the company will continue cooperating with auditors and regulators and “take whatever steps are necessary to restore full trust in the Company’s regulatory compliance.”
Do you work for a cannabis brand? Take our 5-minute survey to help us report on the industry: Click Here