Ascent Industries subsidiary Agrima Botanicals failed to demonstrate to federal authorities that a suspension of its cannabis licenses in Canada is unfounded, putting future operations further in doubt, the company said in a statement.
Prominent shareholder Drew Malcolm is now asking for a general meeting to consider a resolution to replace the current board with seven new directors.
Malcolm now exercises control of 44.78% of Ascent’s issued and outstanding shares.
Previously, he beneficially owned and controlled just 7.66% of the shares.
Ontario-based Agrima has so far failed to provide proof to Health Canada that the failures leading to the license suspensions have been rectified, the company acknowledged in a news release last week.
Agrima has until Feb. 20 to convince the health department otherwise.
Health Canada notified Agrima Botanicals in September that it was suspending the company’s licenses over infractions related to noncompliance with the Access to Cannabis for Medical Purposes Regulations and the Narcotic Control Regulations.
“The agency reiterated its concerns that unauthorized activities with cannabis took place after the Canadian producer’s license and dealer’s license were granted to Agrima,” according to the release.
Ascent has laid off roughly 36% of its staff in Canada.
The company admitted that its future could be in doubt if it is not successful in its attempt to have the licenses reinstated.
The senior leadership of the British Columbia-based parent company abruptly resigned in November.
Ascent’s shares trade on the cannabis-heavy Canadian Securities Exchange as ASNT.