CannTrust to destroy $77 million of cannabis -- here's why
CannTrust Holdings Inc. is a Canadian company that announced this week that it’s going to be destroying around $77 million of cannabis — $65 million of actual product inventory, and $12 million of biological assets (seeds and pre-harvest plants, presumably). At a time when Canada is still experiencing cannabis shortage, why are they doing this? The goal is to try and get back in the good graces of regulators, who cited CannTrust earlier this year for both growing in unlicensed rooms on their property, and also allegedly for growing from seeds purchased from illegal sources.
Yes, this is the current reality of cannabis legality — this company messed up and broke the rules in place as they are, and as a result, they have to destroy millions of dollars worth of cannabis. It seems nuts, but at this point, growing in unlicensed rooms is essentially cheating: As cannabis companies are trying to scale up as quickly as they can, they’re all trying to grow as much as possible, but they’re required to do so within the regulations. CannTrust broke those regulations, and so now to survive as a company, they need to destroy all of this weed so that they can keep their licenses and stay in the game (hopefully making many more millions later, once these issues are worked out).
Destroying the inventory is part of a full “remediation plan” that CannTrust is implementing, and it’s set to present that out to regulators by next week. Hopefully for CannTrust’s sake, the plan will work and the company’s licenses will be restored. It’s a shame that this is happening, but it shows just how important clear and fair regulations are, and how many loops potential cannabis companies need to jump through to be in compliance with the rules, however they’re set out.