There was a drop in the shares of CannTrust Holdings Inc. over 6% after the announcement was made by the firm that its greenhouse facility in Ontario was found non-compliant under certain regulations by Health Canada. The facility was declared so for manufacturing cannabis under 5 unlicensed rooms for the time period of 6 months i.e. from October 2018 to March 2019.
The Applications of the firm were under review by the regulatory body. Licenses for each of these 5 rooms were issued in April this year. There were a total of 12 rooms at the Ontario facility. In addition to this, the firm’s employees provided inaccurate information to the regulator.
The firm has acknowledged the non-compliance findings by the regulatory agency & even ensured to take proper action for maintaining the existing and future compliance.
Shares of CannTrust so far year have dropped 25.4 percent against the industry’s increase of 8.6 percent.
Health Canada placed a hold on around 5,200 kg of dried cannabis which was harvested in the unlicensed rooms in Pelham following the inspection. Also, CannTrust voluntarily held around 7,500kg of dried cannabis grown at its Vaughan manufacturing plant, which was also produced in the unlicensed rooms.
The news came as a huge setback for investors as CannTrust cannot any longer supply the held cannabis until it is considered safe by the regulators. As a result of this, patients might experience a temporary shortage of products because of the restraint placed by the regulatory body. Another update from Health Canada on the quality of product samples seized at Pelham is expected in the coming 10 to 12 business days.
Particularly, operations at both the Vaughan and Pelham sites are fully licensed at this point of time and the firm continues to grow & sell cannabis reaped from the licensed rooms at these hubs.