The woes continue for CannTrust Holdings Inc. as Health Canada has cited them for constructing two rooms at its Vaughan, Ontario without approval, using operating procedures that did not meet federal guidelines, and having inadequate security and quality control at the facility, the Financial Post reports. The agency also said that the company’s documents and information were not kept in a manner that allowed it to complete its audit in a timely manner.
The Health Canada inspection led to the facility receiving a non-compliant rating and CannTrust must propose a remediation plan to regulators.
Interim CEO Robert Marcovitch – who was named head of the company after the company ousted former CEO Peter Aceto and President Eric Paul resigned – said the company “will take whatever remedial steps necessary” to “regain the trust of Health Canada, our patients, shareholders and partners.”
It’s the latest setback for the company who was forced to hold more than 12,000 kilograms of product following a Health Canada action against it last month for growing cannabis in an unlicensed greenhouse in Pelham. The Health Canada action also carried international implications, having forced Danish medical cannabis firm StenoCare to quarantine five batches of cannabis oil derived from CannTrust plants and to later clarify that they had received one shipment of cannabis products grown illegally by the CannTrust – a violation of laws in both countries.
CannTrust told the Financial Post that its affected Canadian inventory was worth about $51 million.
The fallout also led CannTrust financial auditor KPMG to declare that its audits of the company’s financials from 2018 and this year’s first quarter could no longer be relied on.
“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,” the company said in a statement.
According to the Financial Post report, CannTrust is now under investigation by the Ontario Securities Commission and are exploring options including a potential sale.
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