CannTrust Canadian cannabis company to destroy $77 million worth of weed plants and inventory

CannTrust Canadian cannabis company to destroy $77 million worth of weed plants and inventory After running afoul of Health Canada this summer, Ontario cannabis producer CannTrust Holdings Inc. shares shot higher Tuesday after the pot producer announced it will destroy $77 million worth of cannabis plants and inventory as part of its efforts to comply with Health Canada regulations.

Public health concerns over vaping have cast a haze over expansion excitement in the cannabis market. The production and sale of cannabis derivatives edibles, extracts, topicals and vape products become legal Thursday on the one-year anniversary of the legalization of recreational cannabis.

CannTrust first got in trouble with regulators for producing millions of dollars worth of cannabis at a southern Ontario greenhouse that wasn’t licensed. Health Canada froze more than half of CannTrust’s stock of weed and cancelled its licence to produce and sell cannabis in September after the company was busted for growing illegal weed in July. The cannabis assets that the company has to destroy $12 million worth of pot plants and clippings and $65 million worth of inventory were not authorized by CannTrust’s licence.

“We are looking at the root causes of these issues and will take whatever remedial steps are necessary to bring the company into full regulatory compliance as quickly as possible.”

“We are continuing to work hard to regain the trust of Health Canada, our patients, shareholders and partners,” said the company’s interim CEO, Robert Marcovitch, in a statement at the time.

The OPP still maintains a network of third-party facilities with incinerators that adhere to local environmental regulations to burn seized drugs, the force said Tuesday. Live cannabis plants can be incinerated, but are also buried in landfills. The OPP did not have readily available statistics on Tuesday about the amount of drugs it burns.

“These products get out there and then we chase our tails trying to figure out what’s going on, why we are seeing the toxicity, and then try to regulate retrospectively, which is a dangerous way to do things,” said Carlsten, head of respiratory medicine at University of British Columbia.

CannTrust has stated that some of its illicit product was exported to Australia and Denmark. BNN Bloomberg reported that, according to internal company documents, late last year senior operating staff brought black market cannabis seeds into production facilities in Pelham, Ontario. This would have allowed CannTrust to boost its production.

Other steps the company says it will be taking to placate Health Canada include:

- Measures to ensure that cannabis will be produced and distributed only as authorized, including measures to control the movement of cannabis in and out of CannTrust’s site;
- Measures to recover cannabis that was not authorized by CannTrust’s license;
- Measures to improve key personnel’s knowledge of, and compliance with the provisions of the Act and the Regulations that apply to CannTrust; and,
- Measures for improving the manner in which records are kept, including a plan to improve the inventory tracking, and any interim
- Measures to ensure that information provided to Health Canada can be reconciled.

Health concerns may have put a wrench in rollout plans for Canadian cannabis producers, but Damas said the result may actually be users moving to the legal market for vaping cartridges en masse.