Embattled CannTrust halts marijuana sales; Canada’s supply shortfall could worsen

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CannTrust Holdings halted all sales of cannabis products while Canada’s federal regulator inspects its Vaughan, Ontario, manufacturing facility.

The Ontario company received a “noncompliant” rating earlier this week from Health Canada for operating five unlicensed rooms.

That means CannTrust’s 72,000 registered medical cannabis patients will have to look to other producers to fill their orders, likely worsening Canada’s supply crunch.

Some provinces had already pulled CannTrust’s recreational products from store shelves.

CannTrust also established a committee comprised of independent board members to investigate the matter.

Health Canada conducted an unannounced inspection at CannTrust’s facility in Pelham on June 17, days after being tipped off by a former employee about unlicensed cultivation. That resulted in “critical observations” and an overall noncompliant rating.

CannTrust has until next week to respond to Health Canada’s report.

At that point, the regulator will determine the compliance and enforcement action, with growing speculation that CannTrust’s cultivation and sales licenses could be suspended.

The company was also found to have shipped some of the unlicensed medical marijuana overseas.

CannTrust shares trade as CTST on the New York Stock Exchange and as TRST on the Toronto Stock Exchange.