CannTrust gets creditor protection
CannTrust Holdings Inc. announced Friday that federal regulators have reinstated one of the company's licences to grow and sell cannabis, nearly a year after inspectors first discovered marijuana grown in unlicensed rooms that led to the suspension.
CannTrust said Health Canada has reinstated the licence for its Fenwick, Ont. facility after addressing the company's "regulatory deficiencies", clearing the way to resume operations at that location.
The Vaughan, Ont.-based company had its licenses to grow and sell cannabis suspended in September, several months after federal regulators discovered that the company was growing marijuana in unlicensed areas of one of its facilities.
As a result of that infraction, Health Canada seized nearly 5,200 kilograms of dried cannabis and the company instituted a voluntary hold on approximately 7,500 kg at another facility.
That infraction led to CannTrust firing then-CEO Peter Aceto with cause, demanding the resignation of chairman Eric Paul and forming a special committee tasked with probing the regulatory scandal. As well, CannTrust has faced an onslaught of class action lawsuits led by Henein Hutchison LLP partner Marie Henein.
The company was granted protection under the Companies' Creditors Arrangement Act (CCAA) in March and a sales process is currently being managed by court monitor Ernst & Young. CannTrust's shares have been suspended by the Toronto Stock Exchange and New York Stock Exchange as a result of its filing for CCAA.
CannTrust stated it can't provide a timeline on when its newly-grown cannabis products will be available for sale in the market, and noted that the cannabis processing license for its Vaughan manufacturing facility remains under review for reinstatement by Health Canada.
"CannTrust remains without meaningful revenues and has terminated or laid-off a significant portion of its workforce," the company said in a statement Friday.
"The company plans to begin operations following [Friday’s] announcement as an important first step towards rebuilding stakeholder trust and delivering high-quality, innovative products to its patients and customers."