Company to provide detailed remediation plan
to Health Canada by October 21,
2019
VAUGHAN, ON, Oct. 14, 2019 /PRNewswire/ – CannTrust Holdings
Inc. ("CannTrust" or "the Company", TSX: TRST, NYSE: CTST)
announced that it continues to make significant progress on its
commitment to take any and all actions required to both bring the
Company into full regulatory compliance and seek the full
reinstatement of its licenses.
On September 17, 2019, CannTrust
announced that Health Canada had suspended the Company's licenses
to produce cannabis and sell cannabis, without affecting the
Company's ability to continue cultivating and harvesting cannabis.
The Company will not challenge Health Canada's partial suspensions
and remains focused on working collaboratively and transparently
with the regulator to address the Company's non-compliance matters.
In pursuit of this goal, the Company has provided Health Canada
with an outline of its proposed remediation strategy. This strategy
is aimed at implementing the measures identified by Health Canada
as necessary to attempt to address the regulator's concerns,
namely:
- 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.
In order to implement these measures, CannTrust's Board of
Directors has determined that it is necessary to destroy
approximately $12 million of
biological assets and approximately $65
million worth of inventory that was not authorized by
CannTrust's licence. The exact amount of material destroyed will be
validated and verified once the destruction is complete. The
inventory being destroyed includes product that was returned by
patients, distributors, and retailers. Given the status of its
licenses, the Company is unable to process the material being
destroyed or sell it to other licensed producers. The destruction
process will allow the Company to free up much needed capacity to
both implement remediation measures and store material that has
been grown and processed in accordance with the Company's license
since April 5, 2019.
The destruction of the impacted inventory is both an essential
and integral part of CannTrust executing its remediation plan, as
well as addressing Health Canada's remediation expectations. The
Company will provide a detailed remediation plan to Health Canada
on or before October 21, 2019. This
plan will aim to address all of the measures identified by Health
Canada as necessary for the reinstatement of the Company's
licenses.
"CannTrust is confident that its detailed remediation plan will
not only address all of the compliance issues identified by Health
Canada, but it will also build a best-in-class compliance
environment for the future," stated Robert
Marcovitch, the Company's interim Chief Executive Officer.
"We have already made significant progress in these efforts. Our
goal is to meet and exceed Health Canada's regulatory standard, and
to rebuild the trust and confidence of our primary regulator,
investors, patients, and customers."
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 return of the Company's
products, the Company's performance under the Supply Agreement, the
corrective actions being taken by the Company, and Health Canada's
pending determinations. Forward-looking information and statements
necessarily involve known and unknown risks, including, without
limitation: actions taken in respect of the Company's products by
its customers and regulators; results of Health Canada's
investigation, including orders and compliance measures required by
Health Canada and their impact on the operations, inventory, assets
and financial condition of the Company; the Company's
implementation of remediation plans and related actions; 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.