CannTrust Holdings Inc. is set to destroy about $65 million worth of inventory and $12 million worth of biological assets that were not authorized by the company’s Health Canada cannabis cultivation license. The assets’ destruction is part of the firm’s remediation plan and necessary in order for the company to get its license back.
Health Canada suspended CannTrust’s license last month after it had found the company had cultivated cannabis in unlicensed rooms at its grow facilities in Vaughan and Pelham, Ontario. Health Canada gave the Vaughan facility a non-compliant rating and ordered CannTrust to propose a remediation plan in August, one month after the company had to place more than 12,000 kilograms of inventory on hold. Danish company StenoCare was forced to quarantine oil derived from cannabis grown at the CannTrust facilities and the fallout led to the ouster of CEO Peter Aceto and the resignation of President Eric Paul.
Robert Marcovitch, who was named Interim CEO in August, said the remediation plan not only addresses the compliance issues outlined by regulators but “will also build a best-in-class compliance environment for the future.”
“We have already made significant progress in these efforts. Our goal is to meet and exceed Health Canada’s regulatory standard, and to rebuild the trust and confidence of our primary regulator, investors, patients, and customers.” – Marcovitch, in a statement
The inventory that will be destroyed includes products returned by patients, distributors, and retailers. The company said it cannot process the material or sell it to another licensed producer because its license suspension only allows it to cultivate plants it had already started growing and it cannot sell or transfer any products.
CannTrust said it will submit a full remediation plan to regulators by October 21.
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