Vancouver-based Ascent Industries has appealed Health Canada’s decision to revoke the license of its subsidiary, Agrima Botanicals, after the agency said the marijuana company conducted “unauthorized activities with cannabis.”
Ascent also laid off 30 Canadian employees – representing about 36% of its total staff in Canada – “to protect its financial position for stakeholders,” the company said this week in a news release.
Health Canada confirmed via email that it received Ascent’s response on Dec. 17 to the notice of intent to revoke its production and dealer licences. The deadline to submit an appeal was Dec. 17.
The licenses – which are necessary to grow, produce, store and sell medical cannabis in Canada – are currently suspended pending Health Canada’s final decision.
In addition to the layoffs, Ascent board member Amy Margolis resigned “for personal reasons” and the company’s General Counsel Karim Lalani took her place.
This week’s moves follow an overhaul of the company’s executives in November, when CEO Philip Campbell, Chief Operating Officer Reid Parr and President James Poelzer all departed the company.
The company’s stock has been pummeled since Health Canada notified Ascent of its intention to revoke Agrima’s licenses on Nov. 16.
The stock, traded as ASNT on the cannabis-heavy Canadian Securities Exchange, is down over 60% in that time.
It is the first time Health Canada is moving to revoke the license of a cannabis firm, a sign that the government agency is keeping a closer eye on companies for potential violations.
“Health Canada will continue to undertake targeted and random inspections of all cannabis licence holders on a regular basis to help ensure that the Cannabis Act and its regulations are respected and that the integrity of the legal system of production of cannabis is maintained,” the spokesperson told Marijuana Business Daily.
Agrima’s licenses were suspended in September after Health Canada informed Agrima “it did not meet all of its recordkeeping and other compliance requirements,” according to the company.
Agrima changed its story months later, stating: “Health Canada asserts that unauthorized activities with cannabis took place under the company’s ACMPR (Access to Cannabis for Medical Purposes Regulations) license.”
It’s not the first time Health Canada has taken action.
In 2014, Health Canada suspended the licenses of three licensed producers for noncompliance with the ACMPR.
The producers corrected their noncompliance and were restored to “active” license status.
Matt Lamers can be reached at mattl@mjbizdaily.com
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