Ontario cannabis retailer pulls CannTrust products over unlicensed facilities use

By Moira Warburton

TORONTO (Reuters) - The online retailer of cannabis run by Ontario, Canada's most populous province, said on Wednesday it had pulled several CannTrust products from its offerings, after the federal health regulator found the company sold cannabis produced in unlicensed facilities.

The retailer, Ontario Cannabis Store (OCS), said in an email it had "voluntarily removed all affected products from distribution pending the outcome of an investigation." OCS did not specify which products it has pulled.

On Monday, CannTrust Holdings Inc announced that Health Canada was putting a hold on 5,200 kilograms (11,464 pounds) of CannTrust cannabis produced in non-compliant facilities. The company said it was voluntarily holding a further 7,500 kg (16,532 lbs) as a result.

CannTrust, whose shares are down about 35% this week, said it has assisted in identifying lots received by partners that were cultivated in the unlicensed rooms, and will continue to update them on the situation.

"We want to reassure all our patients and adult-use consumers that all product sold has passed quality control testing at Health Canada licensed labs as well as CannTrust's own quality control processes and safety reviews," a CannTrust spokeswoman said in an email.

Health Canada has given the company 10 days to submit a report about its use of unlicensed facilities.

Provincial cannabis distributors for British Columbia and Alberta said they do not plan to pull any CannTrust's products.

B.C.'s Liquor Distribution Board (LDB) said it will not take action unless Health Canada or the company informs it of a problem.

"CannTrust has assured the LDB that all product sold to our operations has passed quality control testing at Health Canada certified labs and through CannTrust's own quality control processes and safety reviews," LDB spokeswoman Viviana Zanoco said in an email statement.

The Alberta Liquor Control Board told Reuters it is conducting its own due diligence of CannTrust products and will take action if needed.

Denmark-based StenoCare, which sells CannTrust cannabis products for medical use, said in a statement on Tuesday that it was quarantining for possible destruction one "very small" batch of products it determined had come from an unlicensed cultivation room. All other product it received from CannTrust was cultivated in compliant rooms, it said.

"This is not expected to have any negative impact on patients nor StenoCare," the company said.

The report from CannTrust is expected to be delivered to Health Canada on July 17.

(Reporting by Moira Warburton; editing by Bill Berkrot)