CannTrust found to be non-compliant with Health Canada cannabis growing regulations

The Financial Post reported this morning that stock in CannTrust Holdings Incorporated plunged 17 per cent after it was discovered that their Pelham, Ontario greenhouse facility is non-compliant with regulations.

Between October 2018 and March of this year the company is reported to have been using five unlicensed rooms to grow cannabis and bolster production. As a result, a hold has been placed on approximately 5,200 kg of dried product grown in the unlicensed rooms by Health Canada. The hold may be lifted if Health Canada deems the company compliant with regulations, but until that decision has been made official CannTrust has put about 7500 kg of dried product from its Vaughan facility – grown in the unlicensed rooms – on a voluntary hold.

“Ultimately this will tarnish the relationship between CannTrust and Health Canada. As part of a site license application, you are obligated to clearly delineate the areas in which you will be cultivating, processing, etc,” says Farrell Miller, regulatory legal specialist at Dicentra.

“This means that the applicant must submit a detailed floor plan that Health Canada will rely on for a site audit. This information is all part of the site evidence package that all applicants must swear contains up-to-date, and accurate information.

“It is unclear what they were missing or what information was inaccurate, but if they wanted to add additional cultivation rooms to the site license, they should have submitted an amendment for approval before beginning a grow cycle.”

Peter Aceto, chief executive with CannTrust released a statement today regarding the regulatory infringement.

“We have made many changes to make this right with Health Canada,” said Aceto.

“We made errors in judgement, but the lessons we have learned here will serve us well moving forward.”

All of this means that Canadians could be facing a potential cannabis shortage. The full implications – alongside the financial impact to CannTrust – will remain unclear until Health Canada completes quality checks on product samples collected from the Pelham greenhouse. Results are expected in 10 to 12 business days.