CannTrust relaunches two brands following illegal cultivation, CCAA filing

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VAUGHAN, Ont. — CannTrust Holdings Inc. is staging a comeback more than a year after its licences were suspended for illegally growing thousands of kilograms of dried cannabis in unlicensed rooms.

The Vaughan, Ont., cannabis firm announced Wednesday that it will reintroduce two recreational brands, Liiv and Synr.g, to the Canadian market this month.

"We're confident that when the customers come back and try our products again, then they'll remember how good and how consistent and high quality they are," CEO Greg Guyatt said in an interview.

"We think we will win them back."

That task may not be easy.

CannTrust remains under Companies' Creditors Arrangement Act protection as it deals with multiple class action lawsuits and other litigation.

The cases were filed after Health Canada discovered illicit cultivation at CannTrust's Pelham, Ont., greenhouse and seized cannabis from unlicensed rooms in the summer of 2019.

Health Canada launched an investigation into the matter, while CannTrust dismissed chief executive Peter Aceto and board chairman Eric Paul departed the company.

The company's licences for growing and processing cannabis were suspended at the time, but earlier this year, Health Canada reinstated those linked to CannTrust's Fenwick and Vaughan facilities.

Guyatt is confident those problems are behind the company.

"It's been a long journey, many hours and a lot of effort from everybody," he said.

CannTrust spent the last 18 months going through a comprehensive remediation program focused on compliance and simplifying the business.

It took a deep dive through its data and analyzed which customers it should target and what brands would resonate with them.

"I'm very confident that the company's back on track," said Guyatt.

"So now the attention changes from the remediation and relaunch into the actual relaunch execution phase right now and getting those products back in the hands of consumers."

So far, CannTrust's strategy is to focus first on Ontario, Alberta and British Columbia. Once CannTrust has established a consistent supply of cannabis in those provinces, it will expand to other markets and introduce new products in 2021.

It is also promising its full line of medical products will return in the near future and that it will enter the nearly year-old cannabis 2.0 market that has focused on edibles, vapes and topicals.

Unlike CannTrust initial entry into the cannabis market, these launches will include addressing a new challenge: COVID-19.

Measures meant to quell the pandemic have created a patchwork of policies that have left cannabis retailers open in some cities, but temporarily closed or operating through curbside pickup in others.

Postal delivery is taking longer in most provinces for cannabis orders made online.

While pot companies saw a surge in sales in the early days of the pandemic, executives now say those spikes are dissipating and they're having to get creative to reach first-time or casual cannabis users.

Guyatt admits these are not ideal circumstances for a comeback.

"Obviously the market has changed and we've been out of the market for some time, but we're going to continue to work hard to educate and inform our customers and patients about our products," he said.

He believes consumers will grow to love CannTrust again and that being late to cannabis 2.0 won't be a downfall.

Getting into such products after competitors allows CannTrust to quickly adjust to new demands in the market and learn from mistakes other cannabis companies made, he said.

"Now we're able to look at the market and look at what's worked and what's not worked and really tailor our product much more specifically to ensure that we can win."

This report by The Canadian Press was first published Dec. 2, 2020.

Tara Deschamps, The Canadian Press