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A Canadian cannabis company has announced it will destroy $77 million of its stock to comply with Health Canada regulations.
CannTrust Holdings Inc, which is based in Ontario, was told in September that its licence to produce and sell cannabis had been suspended.
Its ability to cultivate and harvest cannabis, however, was unaffected.
The company has therefore promised to abide by Health Canada’s decision and has created a “remediation strategy” to comply with the agency.
Its board has determined that it must destroy about $12 million of biological assets and about $65 million of inventory that was not authorized by its licence.
Because of its licence situation, the company is forbidden from selling the cannabis to other producers or to process it.
It will allow the company to free “much-needed capacity” to store material it grows in compliance with its licence.
"CannTrust is confident that its detailed remediation plan will not only address all of the compliance issues identified by Health Canada, but it will also build a best-in-class compliance environment for the future," said Robert Marcovitch, the company's interim chief executive officer.
"We have already made significant progress in these efforts. Our goal is to meet and exceed Health Canada's regulatory standard, and to rebuild the trust and confidence of our primary regulator, investors, patients, and customers."