CannTrust under investigation by Health Canada for illegal cannabis production

Canadian medical cannabis company CannTrust has been forced to suspend operations, following an inspection by Health Canada. CannTrust is a licensed producer of federally regulated medical and recreational cannabis. Yet the company has been accused of producing cannabis without a license, and of erecting false walls in its Pelham, Ontario greenhouse to hide plants that had not yet been approved by Health Canada.

CEO Peter Aceto, said he was taking the investigation «very seriously». He said he was working closely with the government agency to eliminate any risk. «We've made some errors in judgment, but the lessons we've learned here will help us move forward,» he said.

CannTrust has therefore put a 12,000-kilo shipment of cannabis flowers on hold. The company has indicated that a shortage of its products is to be expected, as no exports are permitted during the investigation.

The company also announced in a press release the creation of an independent committee to ensure the compliance of CannTrust's greenhouses.

Danish company StenoCare announced on Wednesday quarantine of 5 batches of cannabis oil from CannTrust's non-compliant greenhouses. The company has sought to reassure its customers that their imported products are always tested by an independent laboratory. The only risks involved are economic for the companies, not health risks for patients.

The financial repercussions are not yet known. CannTrust is listed on the New York Stock Exchange, and the stock had already fallen by 22.47% by the end of trading on Monday July 9.

Health Canada will continue its investigation of the facilities, and has estimated that the control action will be completed by the end of July.