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Sunday, Jan 29, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

The weed wire

CannTrust gets all cannabis licences reinstated a year after regulatory foul-up

After 12 months of turmoil, the embattled producer says it will restart cultivating immediately at its Vaughan, Ontario facility

Troubled producer CannTrust Holdings Inc. says it can start growing legal weed  again one year after it ignited the biggest scandal in Canada’s cannabis industry.

On Thursday, the firm said Health Canada has reinstated all cannabis licences for its Vaughan, Ontario facility and that it will restart cultivation immediately. CannTrust says it expects to have product on the market by the fourth quarter of this year.

“Our licence reinstatement is the result of an enormous amount of hard work by the CannTrust team,” CEO Greg Guyatt said in a statement. “Today marks the beginning of the next chapter in CannTrust’s history.”

CannTrust first ran afoul with Health Canada last June when a whistleblower revealed that the company was growing plants illegally behind fake walls in five unlicensed rooms at its Pelham, Ont. facility.

The federal regulator ended up suspending all of the company’s sales and cultivation licences in September, which led to a year of financial turmoil, layoffs, a CEO ousting, lawsuits and formal investigations. Not to mention CannTrust had to destroy $77 million worth of cannabis, while also tarnishing the whole fledgling industry’s reputation.

CannTrust’s cannabis cultivation and manufacturing facility in Vaughan, Ontario. Press photo

In May, Mugglehead reported Health Canada changed its licensing rules so producers no longer had to submit an amendment when adding a growing area within an approved facility. If those rules had existed just a year earlier, CannTrust wouldn’t have been deemed non-compliant for its Pelham facility, nor have had its key licences stripped.

Read more: What if the CannTrust scandal never happened?

Guyatt, who was appointed CEO of the company in February, said his team used the last 12 months to focus on regulatory compliance while restructuring the business.

The company had its licences reinstated for its Fenwick greenhouse in Niagra, Ont. earlier this year and CannTrust said Thursday cultivation continues to move forward at the site as planned.

CannTrust noted that it remains under creditor protection as the company aims to resolve a number of civil suits and review its business strategies moving forward.

“The company remains without meaningful revenues and has terminated or laid-off a significant portion of its workforce,” reads the firm’s statement.

In March, CannTrust filed for protection under the Companies’ Creditors Arrangement Act, which buys the company time while dealing with litigation issues.

But under the CCAA, the company was also forced to have its stock delisted from the New York Stock Exchange April 27, and from the Toronto Stock Exchange May 6.

Top image via CannTrust

 

jared@mugglehead.com

@JaredGnam

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