Canadian cultivator Bonify shutting down in wake of illegal cannabis sales scandal

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Bonify out of business, Canadian cultivator Bonify shutting down in wake of illegal cannabis sales scandal

The Bonify website has been taken offline.

Canadian cannabis cultivator Bonify Holdings Corp. is shutting down, 2½ years after its sales license was suspended because the company sold illegally sourced marijuana into the regulated market.

Another Canadian company, CannTrust, is currently restructuring after violating federal cannabis regulations.

The impending closure of Winnipeg, Manitoba-based Bonify was announced in an Aug. 12 email to shareholders from CEO Pierre Morris. The email was obtained by MJBizDaily.

“The wind-down started on August 9, 2021 and will conclude in the next few weeks,” Morris wrote in the email, in which he cites “substantial challenges since (Bonify’s) inception, not the least of which was the suspension of its sales license for most of 2019.”

That license was reinstated by Health Canada in late 2019, and the company resumed selling recreational marijuana in Canada in mid-2020.

The privately held company brought products to market in Alberta, Manitoba, Ontario and Saskatchewan after the reinstatement and “realized over $1 million in gross sales in 2021,” Morris noted in his email to shareholders.

He added that Bonify “stabilized internal processes, increased production and significantly cut its operational costs.”

“Unfortunately, these changes were not sufficient to achieve profitability or positive cash flows and Bonify continued to suffer operational losses through 2019, 2020 and 2021.”

Although Bonify “attempted to find new sources of capital, partnerships to grow its revenue base and a purchaser for the business,” Morris wrote, those efforts failed.

His email to Bonify shareholders was first reported by Canadian cannabis news website StratCann.

In an email to MJBizDaily, Morris said he had “nothing further to add” in relation to that report.

Bonify’s illicit-cannabis scandal came to light in December 2018.

Health Canada soon confirmed that Bonify had released “unapproved cannabis products” for sale in the neighboring province of Saskatchewan.

Bonify recreational cannabis products in Manitoba and Saskatchewan were subsequently recalled.

The company hired George Robinson, then CEO of defunct cannabis company RavenQuest BioMed, to undertake an internal investigation.

Robinson revealed that 200 kilograms (441 pounds) of cannabis obtained by Bonify was considered “unauthorized product for sale,” although he said he was unable to determine its origin.

Three Bonify executives were terminated with cause in relation to the scandal, Robinson told media during a news conference at Bonify’s Winnipeg facility.

Bonify’s authority to sell cannabis was suspended by Health Canada in February 2019 but reinstated that October.

In November 2019, the Winnipeg Free Press reported that Bonify had reached out to shareholders to raise short-term capital as it sought acquisition by a larger company.

Despite the license suspension, Bonify was not fined for the violation by Health Canada, the Canadian marijuana regulator confirmed to MJBizDaily this year.

The Royal Canadian Mounted Police, Canada’s federal police force, did not conduct a criminal investigation into the matter, nor did the local Winnipeg Police Service.

Solomon Israel can be reached at