Canopy, Aphria cited for ‘critical’ cannabis regulatory breaches in 2018, new Health Canada report shows

noncompliant Canadian cannabis companies, Canopy, Aphria cited for ‘critical’ cannabis regulatory breaches in 2018, new Health Canada report shows

(This story has been updated with a statement from Aphria.)

Canadian cannabis giants Canopy Growth and Aphria were among a half-dozen licensed producers cited for serious regulatory violations in Health Canada’s compliance report covering the 2018-19 fiscal year.

The federal cannabis regulator also disclosed that it referred 32 cases to the Royal Canadian Mounted Police (RCMP), the federal police service, after conducting marketing-related compliance checks.

The RMCP did not answer queries from Marijuana Business Daily about the results of those referrals.

The new information is from the federal regulator’s report for the fiscal year covering April 1, 2018, to March 31, 2019. 

It’s the first compliance report to cover the period during which recreational marijuana was legalized in Canada, in October 2018.

Overall, federally regulated cannabis businesses were found to be largely in compliance with Canada’s strict regulations.

The report had languished for much of this year as Health Canada focused on the COVID-19 pandemic, the regulator told MJBizDaily.

The inspection data illustrates the state of compliance and shortfalls for the country’s fast-growing marijuana industry that year.

While companies generally complied with the rules, Health Canada did hand out seven noncompliant ratings to cannabis producers from 293 inspections conducted in the fiscal year.

Of the nearly 300 inspections, about 100 “major” and seven “critical” observations were noted.

A “major” observation is recorded for activities uncovered by an inspector that might:

  • Result in a risk to public health or public safety.
  • Involve fraud.
  • Increase the risk of diversion, prevent the detection of diversion or increase health risk.

A “critical” observation is recorded for activities that are likely to:

  • Increase the immediate risk of diversion to the illicit market.
  • Prevent the detection of diversion or present an imminent health risk.

Activities that might involve “the possibility of deliberate fraud, misinterpretation, or falsification of information” are also considered “critical.”

Regulator actions

At least seven noncompliant inspection ratings were noted by Health Canada.

Agrima Botanicals Corp. was given a noncompliant rating after an annual inspection that was conducted in August 2018. Inspectors made “minor,” “major” and “critical” observations.

The company’s products were seized and its license suspended because of “the conduct of unauthorized activities with cannabis,” according to the report.

Aphria, one of Canada’s largest licensed producers, was slapped with “minor,” “major” and “critical” observations after an annual inspection in 2018.

Health Canada issued a warning letter to Aphria because of noncompliance with Good Production Practices and for “a false or misleading statement made to an inspector.”

In a statement to MJBizDaily, Aphria said it has processes and procedures in place “to ensure consistent compliance with all Health Canada regulations and takes its responsibility as a licensed producer very seriously.”

“In connection with Health Canada’s 2018 inspection, Health Canada cited several observations in its inspection report, which were addressed and resolved with Health Canada issuing a compliant inspection rating at its next inspection,” an Aphria spokesperson noted.

Canopy Growth’s joint venture in British Columbia, BC Tweed Joint Venture, also faced serious regulatory violations in the fiscal year.

After a targeted inspection in early 2018, the licensed producer was issued a warning letter due to plant inventory noncompliance.

The joint venture’s second site was also found to be noncompliant, resulting in a warning letter.

In a statement to MJBizDaily, Canopy acknowledged receiving a compliance report in 2018 “and addressed the issues immediately at that time.”

Those facilities are no longer in production.

Near the end of 2018, Manitoba-based Bonify Medical Cannabis saw “minor,” “major” and “critical” observations after a targeted inspection was carried out.

That resulted in the issuance of a warning letter, products being seized and suspension of the company’s license “due to possession, distribution and selling of product that was purchased from an unlicensed source and was not compliant with Good Production Practices.”

Ontario producer Quality Green was found to be noncompliant after inspections were conducted in August 2018 and March 2019, respectively.

A warning letter was issued for the first violation “due to destruction, security measures and recordkeeping noncompliance and to a false or misleading statement made to an inspector,” according to the inspection report.

Personal medical production

Health Canada said it took steps during the fiscal year to strengthen oversight of individuals who grow their own medical marijuana at home.

Some of those steps include:

  • Taking a closer look at applications from practitioners who authorized a high amount of medical cannabis cultivation.
  • Sharing information on practitioners who authorized high amounts with health professional licensing authorities.
  • Better collaboration with law enforcement and municipalities.

Health Canada said it conducted nine inspections in March 2019 for personal medical grows.

Inspections were carried out at four authorized production sites in Ontario.

Nine observations were made in total, according to the report.

Matt Lamers can be reached at