CannTrust to Destroy $65 Million Worth of Inventory
On Sept. 17, CannTrust announced that Health Canada had suspended its licenses, without affecting its ability to continue cultivating and harvesting cannabis. CannTrust has provided Health Canada with an outline of its proposed remediation strategy in order to seek the full reinstatement of its licenses.
In addition to creating new measures to ensure regulatory compliance, 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 license. 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.
Other measures CannTrust will be developing 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.