The investigation via special committee of CannTrust Holdings’ (TRST.C) non-compliance with Health Canada mandated regulations is ongoing, with further information regarding the committee’s membership now available.

On July 11, 2019, the committee was appointed by CannTrust’s board of directors to examine how the company’s Pelham, Ontario, facility came to violate Health Canada guidelines.

CannTrust’s Pelham facility was found to have been used to cultivate roughly 5,200 kg of cannabis in five unlicensed grow rooms. Health Canada has prevented the company from selling this product until the investigation is complete and compliance has been re-established.

Management issued a statement saying they would place a voluntary hold on 7,500 kg of cannabis at its Vaughan manufacturing facility, exceeding Health Canada’s required amount, until a remedy is found.

To that end, the independent special committee charged with the investigation CannTrust’s violations and advising is comprised of Robert Marcovitch, Shawna Page, Mark Dawber, and John Kaden.

“The Special Committee takes these issues very seriously and is committed to working with Health Canada to bring the Company into compliance. Although we want to move as quickly as possible, we are mindful of the critical need to be thorough. We are determined to identify the root causes for all non-compliance issues, to take appropriate actions to address and remediate any issues with the Company’s compliance culture and to restore trust in the Company.”

–Robert Marcovitch, special committee chairman

The committee

Comprised of former executives, auditors and investment bankers, the committee is charged with investigating the company’s non-compliance and making recommendations to CannTrust’s board on any actions they deem necessary.

Besides investigating CannTrust’s violation of Health Canada guidelines, the committee has also been charged with assessing any impact the company’s non-compliance may have on its revenue, inventory, sales and biological assets.

Since news of the company’s non-compliance broke on July 8, the company’s stock has faced significant downward pressure. After closing at $5, TRST shares have fallen to $3.55 as of this article’s writing.

Corrective actions implemented within CannTrust:

  1. Further comprehensive employee training;
  2. Retained external advisers for an independent review of compliance processes;
  3. Comprehensive review and update of processes and procedures;
  4. Voluntarily advised Health Canada of issues that may impact compliance at its Vaughan facility regarding product storage;
  5. Improving the quality and compliance function at the company has been a priority for senior leadership. The first executive addition under the new leadership team was Andrea Kirk, for the newly created role of vice-president, quality. Ms. Kirk brings nearly 20 years of quality and compliance experience from the pharmaceutical industry to CannTrust, and her mandate is to lead the quality and compliance department. Since joining the company in March, 2019, she has hired and trained 17 quality and compliance professionals.

Under the Special Committee’s supervision, CannTrust is in regular communication with Health Canada. The company says it filed a response to the Health Canada report on July 17, 2019, and is currently awaiting an official response.

Where to from here?

On July 15,’s Chris Parry wrote a cautionary article to investors seeking to get in on CannTrust shares while the stock plummeted:

Yes, TRST may rally from here. And yes, they may not lose their license for hanging fake walls to disguise the fact they were growing, and packaging, and selling unlicensed weed. Yes, the CEO and President may even skate by without being fired, let alone jailed. Sure, the class action lawsuits may never go forward.

But they might. And that license may well end up disappearing.

Ascent Industries (ASNT.C) was one such example of an LP getting its license pulled, and the results haven’t been pretty.


The CannTrust dip might turn into more of a skydive, especially considering we’ve seen it before. Keep your web browser trained on for the latest updates on the investigation.


–Ethan Reyes

Written By:

Ethan Reyes

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