One of the country's major cannabis producers has stopped production amid allegations by Health Canada officials that the company was producing product illegally. The business and commercial world was sent reeling recently as CannTrust's market shares plummeted and the company voluntarily halted production at its headquarters in Vaughn, Ontario. The company is accused of growing cannabis at its Pelham, Ontario location between Oct. 2018 and this past March -- in rooms that were apparently unlicensed to do so.
The company has set up an independent committee to look into allegations of rule-breaking at the Pelham facility. Company shares have dropped 40% as a result of this recent allegation by Health Canada. A former CannTrust employee apparently blew the whistle on the company saying that CannTrust was following Health Canada rules for a few months, then decided to move in its own direction.
In a press release CannTrust officials indicated they were being cooperative with Health Canada officials who are further investigating the company. CannTrust could be fined as much as $1 million or lose its cannabis production license entirely. Officials say that they are temporarily curbing production as a precautionary measure.
Ontario companies that become embroiled in business and commercial issues might benefit from the experience of a lawyer well-versed in business law. Often business law crosses paths with other areas of law such as in this particular case. A lawyer is in a position to offer advice and guidance on what might be done when a client is embroiled in a sensitive situation.