Federal cannabis regulator Health Canada is poised to show Canada's legal cannabis industry that it's got teeth, and it's not afraid to use them.
The department is on the verge of revoking the cannabis licenses of Agrima Botanicals, a B.C.-based licensed producer owned by Ascent Industries Corp.
In late September, Ascent informed its shareholders that Agrima's licences to produce and sell cannabis had been partially suspended due to issues with "record keeping and other compliance requirements." The day after legalization, Ascent said it had asked for the licences to be reinstated.
But this past Wednesday, Ascent announced that Health Canada wouldn't lift the suspension, and instead intends to revoke the licences entirely. Three executives also resigned from the company.
At this point, it's not clear what allegedly went wrong at Agrima Botanicals. According to a statement from Health Canada, the company's licences were suspended for "non-compliance" with regulations, which could mean a lot of things.
But a new report in the Globe and Mail suggests the licence suspensions have something to do with the "Toko" brand of cannabis oil vape pens, implying that Ascent Industries may have been selling those products in Canada even though they're not yet legal. (The Toko brand is owned by another Ascent subsidiary called Sweet Cannabis, which operates in Oregon and Nevada.)
Health Canada says it gave notice of the possible revocation to Agrima on November 16, and the company had ten days to respond with an argument for why it should keep its licences. That means a final decision should come early next week, after which Agrima should have a month to appeal the decision.
If Agrima does lose its licences, the Globe and Mail notes, it will be the first time that's ever happened in the history of Canada's legal cannabis industry.
Such regulatory action is long overdue, believes Mike DeVillaer, an assistant professor of psychiatry at McMaster University who has been a consistent and vocal critic of Canada's for-profit cannabis sector. (In 2017, he proposed legalized cannabis in Canada be run by a "non-profit cannabis authority" that would put public health first.)
In DeVillaer's view, Health Canada hasn't done enough to discipline licensed cannabis producers for issues like playing fast and loose with advertising rules, or for the past use of banned pesticides.
"I think this industry has been really emboldened by the lack of punitive action by Health Canada, and I think they need to send a message" said DeVillaer, acknowledging that the full extent of what allegedly happened at Agrima is still unknown.
But if Health Canada does revoke the company's licences, the details may finally be revealed — and other licensed producers will be watching closely.
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