VAUGHAN, ON, July 8, 2019 /CNW/ - CannTrust Holdings Inc.
("CannTrust" or the "Company", TSX: TRST, NYSE: CTST) has received
a compliance report from Health Canada notifying the Company that
its greenhouse facility in Pelham,
Ontario is non-compliant with certain regulations. CannTrust
has accepted Health Canada's non-compliance finding and has taken
actions to ensure current and future compliance.
The non-compliant rating is based on observations by the
regulator regarding the growing of cannabis in five unlicensed
rooms and inaccurate information provided to the regulator by
CannTrust employees. Growing in unlicensed rooms took
place from October 2018 to
March 2019 during which time
CannTrust had pending applications for these rooms with Health
Canada. These rooms were constructed in accordance with regulations
and Good Production Practices, and licenses were issued for each of
the five rooms in April 2019. There are 12 rooms in total at
the facility.
Health Canada has placed a hold
on inventory which includes approximately 5,200kg of dried cannabis
that was harvested in the previously unlicensed rooms in
Pelham, until it deems that the
Company is compliant with regulations. In addition, CannTrust has
instituted a voluntary hold of approximately 7,500kg of dried
cannabis equivalent at its Vaughan
manufacturing facility that was produced in the previously
unlicensed rooms.
CannTrust's operations at its Pelham and Vaughan facilities remain fully licensed and
the Company continues to grow, cultivate, harvest and sell
cannabis. Health Canada is
conducting quality checks of product samples on hold at
Pelham, with results expected in
10 to 12 business days. Due to the product on hold, some CannTrust
customers and patients will experience temporary product shortages.
The Company is exploring options to mitigate these shortages.
All product sold from the impacted rooms has passed quality
control testing at Health Canada certified labs as well as
CannTrust's own quality control processes and safety
reviews.
"Our team has focused on building a culture of transparency,
trust and excellence in every aspect of our business, including our
interactions with the regulator. We have made many changes to make
this right with Health Canada. We made errors in judgement, but the
lessons we have learned here will serve us well moving forward,"
said Peter Aceto, Chief Executive
Officer.
Corrective Actions and Additions to the CannTrust Executive
Team
CannTrust has implemented a number of corrective actions
including:
- Further comprehensive employee training
- Retained external advisors for an independent review of
compliance processes
- Comprehensive review and update of processes and
procedures
- Voluntarily advised Health Canada of issues that may impact
compliance at its Vaughan facility
regarding product storage
Improving the Quality and Compliance function at the Company has
been a priority for senior leadership. The first executive addition
under the new leadership team was Andrea
Kirk, for the newly created role of Vice President, Quality.
Ms. Kirk brings nearly 20 years of quality and compliance
experience from the pharmaceutical industry to CannTrust and her
mandate is to lead the Quality and Compliance Department. Since
joining the Company in March 2019,
she has hired and trained 17 quality and compliance
professionals.
Financial Outlook
At this time, the impact of these matters on CannTrust's
financial results are unknown until Health Canada completes its
quality testing of product from Pelham which is currently on hold.
Further updates will be provided as they become available.
About CannTrust
CannTrust is a federally regulated licensed producer of medical
and recreational cannabis in Canada. Founded by pharmacists, CannTrust
brings more than 40 years of pharmaceutical and healthcare
experience to the medical cannabis industry and serves more than
72,000 medical patients with its dried, extract and capsule
products. The Company operates its Niagara Perpetual Harvest
Facility in Pelham, Ontario, and
prepares and packages its product portfolio at its manufacturing
centre of excellence in Vaughan,
Ontario. The Company has also purchased 81 acres of land in
British Columbia and expects to
secure over 240 acres of land in total for low-cost outdoor
cultivation which it will use for its extraction-based
products.
Forward Looking Statements
This press release contains "forward-looking information" within
the meaning of Canadian Securities laws and "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and other applicable
United States safe harbor laws,
and such statements are based upon CannTrust's current internal
expectations, estimates, projections, assumptions and beliefs and
views of future events. Forward-looking information and
forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expect", "likely",
"may", "will", "should", "intend", "anticipate", "potential",
"proposed", "estimate" and other similar words, including negative
and grammatical variations thereof, or statements that certain
events or conditions "may", "would" or "will" happen, or by
discussions of strategy.
The forward-looking information and statements in this news
release include statements relating to the expected timeframe and
resolution for the completion of Health Canada's quality product
testing and the Company's response to Health Canada's compliance
report. Forward-looking information and statements necessarily
involve known and unknown risks, including, without limitation:
results of Health Canada's quality product testing; regulatory
approval; risks associated with general economic conditions;
adverse industry events; loss of markets; future legislative and
regulatory developments in Canada,
the United States and elsewhere;
the cannabis industry in Canada
generally; and, the ability of CannTrust to implement its business
strategies.
Any forward-looking information and statements speak only as of
the date on which they are made, and, except as required by law,
CannTrust does not undertake any obligation to update or revise any
forward-looking information or statements, whether as a result of
new information, future events or otherwise. New factors emerge
from time to time, and it is not possible for CannTrust to predict
all such factors. When considering these forward-looking
information and statements, readers should keep in mind the risk
factors and other cautionary statements in CannTrust's Annual
Information Form dated March 28, 2019
(the "AIF") and filed with the applicable Canadian securities
regulatory authorities on SEDAR at www.sedar.com and filed as an
exhibit CannTrust's Form 40-F annual report under the United States
Securities Exchange Act of 1934, as amended, with the United States
Securities and Exchange Commission on EDGAR at www.sec.gov. The
risk factors and other factors noted in the AIF could cause actual
events or results to differ materially from those described in any
forward-looking information or statements.
The TSX and NYSE do not accept responsibility for the adequacy
or accuracy of this release.
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SOURCE CannTrust Holdings Inc.