The complications for cannabis licensed producer CannTrust hold piling up immediately after the organization revealed on Monday that Overall health Canada discovered a second of its facilities was in violation of its policies.

CannTrust stated in a news release that it received a report from Overall health Canada on Friday, August 9, that stated its Vaughan, Ont., manufacturing facility was non-compliant with particular regulations primarily based on inspections from July 10-16, 2019.

Overall health Canada discovered 5 rooms in the facility have been utilized to shop cannabis considering that June 2018 without the need of the agency’s approval, and two new places have been constructed without the need of Overall health Canada’s approval, a single of which stored cannabis.

In addition, Overall health Canada says the organization also has inadequate safety and good quality assurance procedures and did not retain information and facts to Overall health Canada to permit the agency to full its audit in a timely manner.

The infringements at the Vaughan facility came about a month immediately after Overall health Canada’s 1st findings of non-compliance at CannTrust’s Pelham, Ont., facility, which started the company’s downward spiral.

Overall health Canada discovered cannabis had been grown in 5 unlicensed rooms in the facility, top CannTrust to place more than 10,000 kg of cannabis stock on hold and Overall health Canada to launch an investigation into its Vaughan facility.

Negative news hold coming for the LP

Given that then, the Ontario Securities Commission (OSC) launched an investigation into the organization, CannTrust withdrew all of its cannabis goods from shops, its stock plunged, CEO Peter Aceto was fired, and chairman Eric Paul resigned.

The impacted inventory and assets have been worth about $51 million as of June 30, according to CannTrust.

CannTrust’s stocks fell 24 % in premarket trading Monday immediately after the most up-to-date news, ending at just more than $three a share in the Toronto Stock Exchange. It was trading at $six.46 just before the 1st news of non-compliance broke.

CannTrust says it is operating with Overall health Canada on the most up-to-date infringements to uncover their “root causes.”

“We are continuing to function difficult to regain the trust of Overall health Canada, our sufferers, shareholders, and partners,” interim CEO Robert Marcovitch stated in a statement. “We are seeking at the root causes of these troubles and will take what ever remedial actions are vital to bring the Organization into complete regulatory compliance as immediately as doable.”

Overall health Canada’s investigation could outcome in the suspension or termination of CannTrust’s cannabis licenses and fines up to $1 million.

The organization has warned it may well miss its second-quarter and six-month outcomes mainly because of the uncertainty of Overall health Canada’s influence.

Accounting firm KPMG stated Friday that it is withdrawing its earlier report on CannTrust’s 2018 monetary outcomes due to the possibility that the outcomes are not correct.

The organization has hired Greenhill & Co. to discover techniques to move forward, such as a sale.