More Trouble for CannTrust as Health Canada Finds Vaughan Facility Non-Compliant

More Trouble for CannTrust as Health Canada Finds Vaughan Facility Non-Compliant

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CannTrust’s woes with Health Canada are far from over, according to the Financial Post. The company’s facility in Pelham, Ontario was hit with a non-compliance rating by Health Canada following several violations, most notably unlicensed grow rooms. Now, a second location is under the microscope/

As company shares dropped and profits reached a grinding halt, CannTrust began working to rebuild public trust and possibly sell to another organization.

But now, Health Canada found more compliance issues, this time at the company’s second location. Not only is the Vaughan facility now in Health Canada’s crosshairs, but it revealed a whole new list of violations.

 

Violations

 

One of CannTrust’s original violations back in their Pelham facility was the presence of grow rooms that had been in operation for months before being licensed. Their excuse was that the process was taking too long.

It appears that CannTrust once again tried to jump the line, albeit in a different area. However, these violations date back months before recreational legalization. As the Financial Post explains:

 

“Health Canada’s rating for the Vaughan plant was based on an inspection between July 10 and July 16, and noted that five rooms, converted from operational areas, were used for storage since June 2018 without prior approval by the regulator.”

 

Again, CannTrust made decisions in defiance of Health Canada. But it does not end there. Not only were there more changes made without approval, but CannTrust also failed to take proper precautions:

 

“The regulator also said two new areas were constructed without prior approval and that security as well as quality assurance investigations were inadequate at the facility, while operating procedures did not to meet requirements.”

 

This is interesting, as our last article on CannTrust mentioned several reviews from current and former employees, complaining about management’s lack of adherence to procedures and labour laws.

The third issue was CannTrust’s apparent attempt to keep documentation out of Health Canada’s hands in an attempt by CannTrust to cover its tracks:

 

“The company said the regulator also had found documents and information were also not retained in a manner to enable Health Canada to complete its audit in a timely manner.”

 

This all comes at a time when a second authority – the Ontario Securities Commission – is currently looking into CannTrust.

 

Financial Impact

 

CannTrust’s conduct continues to erode its financial standing, biting into its stock value and, according to the Financial Post, keeping its remaining inventory in an unsellable limbo. This inventory forms a sizeable chunk of CannTrusts $51 million worth of “…inventory and biological assets.”

According to the Financial Post:

 

“U.S.-listed shares of the Canadian grower, down 36 per cent in the past month after it suspended sales, fired its chief executive officer, disclosed a formal investigation by local regulators and said its results would have to be restated, fell another 26 per cent in early trading to $2.30.”

 

Despite assurances from CannTrust’s new CEO, Robert Marcovitch, a second major violation significantly lowers the company’s chances of receiving a fresh start from Health Canada.

 

WeedAdvisor’s Emphasis on Compliance

 

CannTrust is an extreme example, but still a perfect illustration about what happens when compliance severely fails.

As the Financial Post points out above, one issue was poor execution of security measures and quality assurance evaluations. These are just a fraction of the issues our business solutions prevent.

Even companies acting in good faith can run afoul of Health Canada over some unintentional oversight, yet still suffer the same penalties and loss of reputation as CannTrust. Consequently, this inevitably leads to a sharp drop in sales and value.

However, our compliance solutions form just one of many services available that help maintain consistent, accurate records; track employee compliance, collect data in real-time and compile reports automatically so that they are ready to present to regulatory bodies

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