Production Licence Suspension for CannTrust?

Thousands of Patients in Limbo While Experts – and Perhaps Health Canada – Debate Production Licence Suspension – LPC

CannTrust Holdings faces a possible production licence suspension after admitting to misleading Health Canada. The federal health agency issued a non-compliance order on CannTrust for growing cannabis in unlicensed rooms in its Pelham, Ontario facility. It also put a sales freeze on the 5,200 kg of cannabis that had been grown there.

CannTrust’s stock dropped 40 per cent, but the worst might be yet to come. Several cannabis industry analysts debated the likelihood of a full production licence suspension for CannTrust.

Canaccord Genuity Corp. analyst Derek Dley wrote that it was a good possibility. “The major concern among investors… is whether Health Canada will look to make an example out of CannTrust.” He continued that originally, the company viewed a production licence suspension as unlikely. “We are now acknowledging that this could be within the realm of possibility.”

Royal Bank of Canada analyst Douglas Miehm wrote that he feels the opposite. “The agency has historically suspended licences when [licensed producers] were found to source/divert product from/to an unregulated channel. In our view, the CannTrust situation does not appear as dire as these scenarios,” Mr. Miehm wrote.

CannTrust itself acknowledged on July 11 that a production licence suspension was possible. “We are taking these observances very seriously,” the company said in a statement. “We are working closely with Health Canada… as well as conducting a full internal investigation.”

Little Word on Medical Cannabis Patients – LPC

Most of the debate is on the legal and economic implications of a production licence suspension. Meanwhile, according to Marijuana Business Daily, 72,000 CannTrust patients are now in limbo after CannTrust halted sales Thursday night. There are already reported cannabis supply chain issues and fears that medical cannabis patients may be affected. If CannTrust loses its production licence, where would these patients go? And what will they do in the meantime?

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