Health Canada Issues First License Reinstatement to Cannabis Firm

In a first for the Canadian cannabis market, a suspended sales licence for a privately owned licensed producer has been reinstated by Health Canada.

On Wednesday (October 23), the Winnipeg-based cannabis producer Bonify announced it would now be able to move its products back onto shelves after having its license revoked in February due to concerns about health and public safety.

In December 2018, Bonify had two separate recalls of its dried cannabis products for labeling issues and failing to meet “microbial and chemical contaminant limits as specified by the Good Production Practices requirements of the Cannabis Regulations,” according to one of the recall alerts.

Health Canada spokesperson Eric Morrissette said in a statement that along with the contamination issues, Bonify was found to be processing and distributing product from an illegal source to stores in Saskatchewan.

As a result, the Manitoba Liquor and Lotteries Corporation, the firm’s home province cannabis wholesaler, and the Liquor, Gaming and Cannabis Authority of Manitoba, the provincial cannabis regulator, suspended the sale of Bonify’s products.

Now that Bonify’s license has been reinstated, one public cannabis player is raising its hand to indicate its own involvement in the license change.

RavenQuest BioMed (CSE:RQB,OTCQB:RVVQF), which has its hand in consultancy work for the marijuana industry, was hired to provide “the necessary direction and corrective action” to improve Bonify’s operations, according to the company.

George Robinson, CEO of RavenQuest and current interim CEO of Bonify, told the Investing News Network (INN) the 10 month process of bringing Bonify back up to regulatory compliance started with rejigging the company culture to both reinforce awareness and that following the operating standards was the main priority.

The process involved adjusting Bonify’s standard operating procedure (SOP) documents to reflect this planned culture shift.

“The standard operating procedures that were in place prior to (the license suspension) occurring … were actually pretty solid. But there was (no) additional steps in there to say ‘If you feel that you’re being pressured to do something that’s outside of the SOP or outside the regulations, call this person or call Health Canada,’” Robinson told INN.

Robinson added that Bonify voluntarily suspended its sales license in December 2018 ahead of Health Canada’s initial inspection when the federal agency formally revoked the license.

The executive said RavenQuest helped Bonify’s core management team to identify the areas in which the company was failing and who was responsible for the failures, putting measures in place to prevent senior management from making choices that could lead to non-compliant operations.

“The changes in there were to give the employees … escape routes out … if they feel they’re being pressured to do something,” Robinson told INN.

RavenQuest expresses confidence in new compliance strategy, offers services to non-compliant firms

The company touted it now has the roadmap for bringing non-compliant cannabis operators up to Health Canada standards and it is open to helping other cannabis firms dealing with license suspensions.

Robinson said RavenQuest now has a process that will allow companies to demonstrate to Health Canada the changes put in place in the event of a license suspension. The new process involves acting out specific operations to show the regulator its standards are up to scratch.

He said that, as a part of the overhaul of Bonify’s operations, vendor qualifications were also established to prevent illicit product from entering Bonify’s facilities and from being distributed to other parties, meaning it could take four to six weeks before its products are back on the shelves.

Perhaps the best known non-compliance issue in the cannabis space was the CannTrust Holdings (NYSE:CTST,TSX:TRST) debacle.

CannTrust had its production and sales license suspended in September after an investigation revealed the Ontario-based producer was growing cannabis illegally in unlicensed rooms.

The suspension followed a particularly trying summer for the cannabis firm during which it was found that high level executives, including former CEO Peter Aceto and former Chairman Eric Paul, were aware of the illegal operations.

Agrima Botanicals, subsidiary of Ascent Industries, also had its licenses revoked in July after Health Canada found that “unauthorized activities” took place at the company, CBC reported.

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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.