CannTrust Licenses Suspended, Shopify Enters US, Canopy Ex-CEO’s Next Gigs, & More…

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Health Canada will suspend CannTrust’s license.

The Canadian cannabis company, once considered to be among the top in the world, announced yesterday that it received a Notice of Licence Suspension from Health Canada. 

To refresh: In July, Health Canada found the company’s facility in Pelham, Ontario non-compliant after cannabis was found growing in five unlicensed rooms. In total, just under 13,000 kg of cannabis product were put on hold and CannTrust estimated that, as of the end of June, “the value of the impacted inventory and biological assets is approximately $51 million.”

The company came under investigation by securities officials in August. “Today, staff of the OSC advised the Special Committee’s legal counsel that an investigation has been opened into matters and parties related to CannTrust and the investigation has been assigned to the Joint Serious Offences Team of the Enforcement Branch of the OSC,” the company said in the announcement.

Also in August, CannTrust said that yet another facility had been deemed non-compliant, this one in Vaughan, Ontario. During an inspection in mid-July, Health Canada officials found, among other things: unapproved conversion of rooms into storage areas, construction of new rooms without approval, lacking security, lacking quality assurance protocols, and “documents or information that were not retained in a manner to enable Health Canada to complete its audit in a timely manner.”

The new interim CEO Robert Marcovitch said in a statement at the time, “We are continuing to work hard to regain the trust of Health Canada, our patients, shareholders and partners. We have retained independent consultants who have already started addressing some of the deficiencies noted in Health Canada’s report. We are looking at the root causes of these issues and will take whatever remedial steps are necessary to bring the Company into full regulatory compliance as quickly as possible.”

Now, the suspension. The company said yesterday: “While the suspension remains in effect, CannTrust will be permitted to cultivate and harvest existing lots or batches previously propagated, as well as conducting ancillary activities to those lots, including drying, trimming and milling. During the suspension, CannTrust may not propagate new lots or batches of cannabis or engage in the sale or distribution of cannabis.”

Assuming the company turns its act around enough to satisfy officials, it could potentially resume use of its licenses. 

Ex-Canopy Growth CEO Bruce Linton makes his next move. 

The cannabis industry was stunned in July when Canopy Growth founder and CEO Bruce Linton was fired. Linton grew the company to become one of the highest valued in the world. Since then, the question has been: what will Linton do next? Yesterday, CPG company SLANG, which had received investment from Canopy in the past, announced Linton has invested roughly C$250,000 and would be an “active investor.” 

Further, Linton has become executive chairman of Michigan cannabis company Gage Growth Corp. It’s worth noting that the announcement of his appointment is timed with the company’s rebranding, as it was previously Gage Cannabis Co. (In other words, the decision to add “Growth” to the name seems aimed, perhaps a bit, at Linton’s former home.) Another parallel: Gage will acquire something called Rivers Innovations, which will be the company’s “investment vehicle formed to invest and partner strategically with private company operators in the US cannabis sector,” according to the announcement, which sounds strikingly similar to Canopy Growth’s investment arm, Canopy Rivers. 

And, finally, Linton will be a special advisor to CBD-focused Better Choice Company.

Shopify enters US cannabis industry.

The e-commerce platform is already active in Canada’s cannabis industry, as it is already used to process plenty of adult use cannabis sales there. While it can’t quite make that sort of leap in the US, where cannabis is still federally illegal, the company announced yesterday that it is open for business for hemp and CBD companies. 

The company tweeted a sleek video yesterday alongside the announcement: “*Taps mic* Is this thing on? We have some news: Starting today, we’re ready to support hemp-derived CBD businesses in the US ?#ShopifyxCBD”

Trait Biosciences’ new strategic advisory board includes folks from Bacardi and Coca-Cola.

The biotech company’s three appointments, which will focus on CBD-related development, are: Keith Levy, formerly a president at Mars Wrigley; Pete Carr, current president of Bacardi North America; and Genève Stewart, current VP the Coca-Cola Company’s natural strategic sales team.

GB Sciences to sell its stake in GB Sciences Louisiana just one month after the state’s medical cannabis program launch.

The Nevada-based company will sell its 50% stake to Wellcana Plus in a deal for up to $32 million. 

This move is unexpected. As Cannabis Wire recently covered, Louisiana’s medical cannabis program went live years after the law was passed. Two universities were allowed to grow medical cannabis for the program: Louisiana State University and Southern University. (The arrangement is unique among states that have legalized medical cannabis.) 

As noted in the piece: “LSU put out a call for bids for growers and GB Sciences Louisiana won, offering LSU 89% of the net cash flow from the project, or $18 million over seven years. In its application, GB Sciences also stated that ‘it can conservatively achieve 5,000 patients by 2021’ through a $300,000 annual investment in a nonprofit to educate Louisianians—including doctors and lawmakers—about the benefits of medical cannabis.”

But soon after, the company found itself at odds with a local regulator and the Louisiana Department of Agriculture and Forestry. Read the full story here.


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