CannTrust has since been under the spotlight for having violated a number of rules regarding cannabis production. With their senior management witnessing a complete cleansing, followed by their supposed illegal growing and lawsuits-attached, comes more news as to what has been going on within the walls of the Canadian medical cannabis provider.
Turns out, that the firm has been using black market cannabis seeds in its production reports BNN Bloomberg. It doesn’t end there! Interestingly, the firm’s employees have altered the names of nearly 20 strains so that it would match what the firm is legally licensed to grow – and to add to it, nearly 20% of these employees have already been laid off.
Nearly 1000 grown plants flourished in using illegally-source strains. The question still remains as to how much of the plants were actually delivered to the legal markets, now that it is clear that the firm may have been participating in the black markets as well.
As per unnamed sources, the company had to up their production in order to meet the deals established with distributors and other producers. BNN Bloomberg was the first to have reported on this matter, and they seem to have gotten hold of spokesperson, Jane Shapiro, who was referenced saying:
“To the best of our knowledge, no product using seeds from unauthorized external sources was introduced into the market.”
When it comes to the possible charges, Health Canada supposedly shared with BNN Bloomberg that selling illegal cannabis can result in anything between a fine to 14 years of prison time. In the case of CannTrust, the firm is currently slapped with a warning letter, a one million dollar fine and a license that has been revoked.
This creates a domino effect in which the firm’s stock continues to witness a drop in value. Given all the allegations and poor stock performance, the news outlet disclosed that it may be removed from the S&P/TSX composite as early as this month.
Then comes employees, with the firm having slashed its team by 20 percent. The Interim CEO, Robert Marcovitch, has since publicized that the overall restructure in their workforce was crucial amidst their “current requirements of [their] business,” adding that,
“These changes also position the company to better serve our patients and customers with high quality, innovative products.”