Cannabis grown in unlicensed rooms by cannabis producer CannTrust could meet the legal definition of "illicit cannabis," lawyers say, but an exception in the law means Canadian consumers don't need to worry about possessing that forbidden weed.
"Illicit cannabis is defined in the (federal) legislation as 'cannabis that is or was sold produced or distributed by a person prohibited from doing so' under the (Cannabis) Act," said Matt Maurer, vice-chairman of the cannabis law group at Torkin Manes LLP in Toronto.
Since the Cannabis Act outlaws commercial cannabis production without a licence attached to a specific production site, Maurer explained, any cannabis grown outside the scope of those licences would technically qualify as illicit.
That's exactly what appears to have happened at CannTrust, an Ontario-based licensed producer which disclosed Monday that it grew cannabis in five unlicensed rooms of its Pelham, Ont. greenhouse between October 2018 and March 2019.
Those rooms weren't licensed for cultivation until April 2019. A Wednesday Globe and Mail report quotes a former CannTrust employee who alleges the company concealed thousands of cannabis plants behind fake walls in order to take photographs meant to deceive Health Canada during the licensing process.
Health Canada declined to answer direct questions this week about whether CannTrust's unlicensed crops count as illicit cannabis. A spokesperson for the federal cannabis regulator acknowledged that cannabis production in an unlicensed area "is considered non-compliance" with the federal regulations that govern cannabis production, and said Health Canada is still waiting for CannTrust to formally respond to its inspection report before taking action.
CannTrust cannabis is widely distributed across Canada, under the CannTrust brand name in the medical market and under the brand names Liiv, Synr.g, Xscape and Peak Leaf in the recreational market. In a statement Thursday, the company said it has recreational cannabis supply agreements with all ten provinces, although it hasn't yet shipped product to Quebec.Advertisement
CannTrust also confirmed that some of the cannabis grown in the five unlicensed rooms "would have been shipped to CannTrust (recreational cannabis market) partners after passing quality testing at Health Canada-approved labs and CannTrust's own quality control processes and safety reviews," and that some of the unlicensed cannabis was also shipped to medical cannabis consumers after undergoing the same testing regime.
CannTrust declined to comment on whether the cannabis meets the definition of illicit cannabis, but said it was "conducting a full internal investigation and preparing a report to the regulator, including mitigating factors."
Even though it's strictly illegal to possess illicit cannabis, any Canadians with CannTrust weed in their stash shouldn't fear legal consequences — the law only forbids possession of illicit cannabis "that they know is illicit cannabis."
"No one who purchased from the (Ontario Cannabis Store) or a licensed retailer would have known it was illicit," explained cannabis industry lawyer Trina Fraser, a partner at Brazeau Seller Law in Ottawa, by email.
"And even if the offence was strictly possession, there's no chance that charges would be laid against a consumer who purchased seemingly legal cannabis in good faith from a legal retailer."
CannTrust cannabis has not been formally recalled, but some provincial cannabis stores and regulators have started putting the brakes on sales and distribution of CannTrust product since Monday.
A spokesperson for the Ontario Cannabis Store said it has "voluntarily removed all affected products from distribution pending the outcome of the investigation," and the Alberta Gaming, Liquor and Cannabis agency is also putting a hold on online sales and wholesale distribution of affected lots of CannTrust product "as a precautionary measure". (Privately-operated Alberta cannabis retailers can use their own discretion to decide whether or not to continue selling the CannTrust products they already have in stock, an AGLC spokesperson said.)
Private cannabis retailers in Manitoba can continue ordering CannTrust products, said provincial cannabis wholesaler Manitoba Liquor and Lotteries, citing the absence of a recall notice from Health Canada.
Spokespeople for the Nova Scotia Liquor Corporation, the British Columbia Liquor Distribution Branch, New Brunswick's Cannabis NB and the Saskatchewan Liquor and Gaming Authority said the status of CannTrust cannabis in those provinces is unchanged.