(Reuters) - Health Canada on Monday slapped a non-compliant rating on CannTrust Holdings Inc's (TO:TRST) (N:CTST) Vaughan, Ontario facility, about a month after the regulator found unlicensed pot growing at another operation in the province.
U.S.-listed shares of the company, which accepted the health regulator's findings, were down about 25% at $2.39 before the opening bell.
The company said Heath Canada's rating was based on observations made during an inspection completed between July 10 and July 16, and noted that five rooms, converted from operational areas, were used for storage since June 2018 without prior approval by the regulator.
The regulator also noted that two new areas were constructed without prior approval and that security controls as well as quality assurance investigations were inadequate at the facility, while operating procedures did not to meet requirements.
Documents and information were also not retained in a manner to enable Health Canada to complete its audit in a timely manner.
Last month, Health Canada placed on hold about 5,200 kilograms of dried cannabis harvested in five unlicensed rooms. CannTrust also put a voluntary hold on 7,500 kg of inventory made in the rooms.
CannTrust, which was notified of the non-compliance on Friday, said it had already begun investigating and remediating the root causes of any non-compliance and expects to propose a robust remediation plan to Health Canada.