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Bonify executives fired over 'unauthorized' cannabis sold in Saskatchewan

Front-line employees felt "bullied and threatened" by management: consultant

Three executives have been turfed from licensed cannabis producer Bonify, following an internal investigation into how the troubled Winnipeg firm sold "unauthorized" product through government-licensed marijuana stores in Saskatchewan, the company said Thursday.

During a news conference at Bonify's headquarters, the consultant hired to investigate the company and take over its management said his probe found "irregularities pertaining to the recalled product."

"Specifically, a forensic investigation shows that 200 kilograms of product, which was available for sale in Saskatchewan only, was unauthorized product for sale," said George Robinson, chief executive officer of RavenQuest BioMed Inc.

Robinson stopped short of describing the cannabis, which was sold in Saskatchewan in November and recalled on Dec. 7, as "illegal." (That's how a source described it in the Free Press report that broke the story a week ago.)

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Three executives have been turfed from licensed cannabis producer Bonify, following an internal investigation into how the troubled Winnipeg firm sold "unauthorized" product through government-licensed marijuana stores in Saskatchewan, the company said Thursday.

During a news conference at Bonify's headquarters, the consultant hired to investigate the company and take over its management said his probe found "irregularities pertaining to the recalled product."

George Robinson stopped short of describing the cannabis, which was sold in Saskatchewan in November and recalled on Dec. 7, as "illegal." (Ruth Bonneville / Winnipeg Free Press)</p>

George Robinson stopped short of describing the cannabis, which was sold in Saskatchewan in November and recalled on Dec. 7, as "illegal." (Ruth Bonneville / Winnipeg Free Press)

"Specifically, a forensic investigation shows that 200 kilograms of product, which was available for sale in Saskatchewan only, was unauthorized product for sale," said George Robinson, chief executive officer of RavenQuest BioMed Inc.

Robinson stopped short of describing the cannabis, which was sold in Saskatchewan in November and recalled on Dec. 7, as "illegal." (That's how a source described it in the Free Press report that broke the story a week ago.)

"It was procured in a manner not through the normal purchasing requirements laid out in the regulations," said Robinson, whose company produced an internal report on the incident that was not shared with media.

The report didn't determine where the "unauthorized" cannabis came from, he said. "I can tell you right now: no one in here and in our investigation could actually tell you where the source of the material came from."

Of the unauthorized marijuana Bonify shipped to Saskatchewan, 52 packages weighing 3.5 grams each were sold at stores, Robinson said, adding those products might pose a health risk.

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"The first recall was due to inconsistencies in the product, from different reasons from microbials being out of specification, yeast and mould, and... (the) unconfirmed presence of E. Coli."

A second recall of Bonify cannabis sold in Manitoba was due to unrelated issues, according to Robinson, and none of the unauthorized product was sold in the province.

There are no health concerns related to Bonify products sold in Manitoba, Robinson said.

Those products were yanked off store shelves last week by the Liquor, Gaming and Cannabis Authority of Manitoba and Manitoba Liquor & Lotteries Corp.

On Christmas Eve, Bonify issued a voluntary recall through Health Canada of 14 lots of products sold in Saskatchewan and Manitoba. The recall notice cited "record-keeping issues with production documents" in some cases, and inaccurate labelling in others.

"We said, 'We are going to take everything that would not pass a Health Canada audit, and we're going to take that out of the system,'" said Robinson. "It had nothing to do with safety of the product, it had to do with record-keeping."

Robinson said the three executives let go were terminated with cause, but refused to name them for privacy reasons. An executive assistant was also terminated without cause, he said, and an unnamed board member has been suspended.

Before this incident, the cannabis industry consultant said, Bonify "had a stellar record of record-keeping and reporting."

But a recent, unspecified "cultural change" in the organization "created many irregularities across the whole internal and external supply chain," said Robinson, especially right before legalization Oct. 17.

"And there seemed to be a lot more pressure coming in right after that, (which led) the company to make very poor decisions in the processing of paperwork and poor choices in trying to meet supply agreements."

Staff at Bonify had raised concerns about the product, according to Robinson, and informed senior management, as well as the board of the private company.

"The front-line workers were trying to do their job, and there was others who were instructing to them to not follow the regulations," he said. "And that got us to the point where we're at today."

Robinson later said his investigation found some employees "felt bullied and threatened" after speaking out. 

Health Canada told the Free Press it received an emailed complaint about Bonify in November, but Robinson said he didn't know whether it was an employee who had alerted the federal regulator.

Robinson said a redacted copy of his internal report has been shared with federal and provincial cannabis regulators in Manitoba, who may continue the investigation further.

A spokeswoman for the LGCA confirmed the provincial cannabis retail regulator received the report "as a courtesy," but said an investigation would fall under the regulatory purview of Health Canada. A spokesman for MLL said the provincial cannabis wholesaler is not investigating Bonify for the same reason.

A Health Canada spokesman said the department is "currently assessing all available information, including the information provided by the company related to their internal investigation."

"As the situation remains under review, we will determine the appropriate compliance and enforcement next steps once all the facts have been thoroughly examined," wrote the spokesman, who added that local law enforcement is aware of this situation.

In the meantime, Robinson said Bonify will keep its Health Canada licences to produce and sell medical cannabis, but will be under "critical observation" from the regulator, which means unannounced audits.

Robinson said Bonify's non-medical cannabis has only been sold in Manitoba and Saskatchewan, to his knowledge. It might be some time before the company's products are on store shelves once again, he said.

"I think there's no doubt that when something like this happens, you're going to have to rebuild trust again."

solomon.israel@theleafnews.com
Twitter: @sol_israel

History

Updated on Thursday, December 27, 2018 at 6:04 PM CST: adds comment from LGCA

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