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Potential Non-compliance with the Cannabis Act and Implications for Licensed Producers
Potential Non-compliance with the Cannabis Act and Implications for Licensed Producers
Vlad Mihaescu, HBA, JD
Bonify and Agrima License Suspensions
On February 4, 2019, Bonify Medical Cannabis (“Bonify”), a Winnipeg-based licensed producer, had its license to sell cannabis suspended by Health Canada. After having received its sales license earlier the same year, Bonify had two recalls of its dried cannabis products in December 2018. The first recall was for alleged contamination issues. The second recall resulted in 14 lots of product being recalled due to alleged record-keeping and labelling issues.
Following an internal investigation of the incidents by an independent consultant, it is said that Bonify was found to have sold up to 200 kilograms of cannabis in Saskatchewan that was purchased from unauthorized sources. Reportedly, employees of the company had tried to express concerns to management over the illicit cannabis, but were subsequently threatened in order to stay silent on the matter. Three executives were terminated for cause and one director has been suspended as a result. Some have indicated in the media that it is suspected that the company felt pressure to sell the illicit cannabis in order to satisfy its supply agreements with Saskatchewan and Manitoba retailers.
Bonify had 10 days to respond to Health Canada’s suspension of its sales license. Neither the status of Bonify’s response nor Health Canada’s assessment of such response is known at this time, however the company has hired a third party consultant, RavenQuest Technologies, to provide operational oversight in an effort to rectify the situation and re-establish the company’s compliance with applicable laws and regulations. Bonify continues to produce cannabis in hopes that the suspension will be lifted.