• Cannabis grown in unlicensed facilities in Canada by NYSE-listed CannTrust may have found its way to Australia via its distribution deal with Victorian medicinal marijuana company Cannatrek.
• The Australian Therapeutic Goods Administration said it is Canada’s job to ensure exports are legal and that it hasn’t been notified of any issues by the Canadian authorities. Cannatrek has not responded to requests for comment.
  
• However, cannabis industry expert Rhys Cohen told Business Insider Australia the government’s response is “not good enough” and demonstrates the problems in Australia’s system of importing the drug.
  

Australian consumers could be exposed to illegal and potentially even harmful batches of cannabis as the scandal surrounding Canadian medicinal marijuana company CannTrust heads down under.

New York Stock Exchange-listed CannTrust has lost nearly two thirds of its value since July, when an audit by Health Canada, which found non-compliance with federal regulations, was made public.

The audit found the company was growing cannabis in five rooms at its facility in Vaughan, Ontario, which were not approved for cultivation or storage.

CannTrust claimed the products cultivated in the problematic rooms “passed quality control testing” by Health Canada and believes its products are safe. Despite this, its customer Ontario Cannabis Store has returned approximately $2.9 million worth of CannTrust product to the grower and Danish distributor StenoCare has quarantined its CannTrust imports.

StenoCare has also sounded the alarm on whether CannTrust products can be reliably considered “pesticide free” as the company has previously claimed.

The saga has sparked fears that Australian consumers could also be at risk by way of CannTrust’s distribution agreement with Victorian medicinal marijuana company Cannatrek, which imports the drug to Australia to treat patients with approved chronic illnesses.

“A portion of the cannabis cultivated in the five rooms pending licensing would have been shipped” to Australia, a CannTrust spokesperson told Denver-based publication Marijuana Business Daily. Business Insider Australia has approached CannTrust for confirmation of these comments.

Cannatrek is the only Australian cannabis company with known ties to CannTrust, and cannabis industry expert Rhys Cohen told Business Insider Australia he’d be surprised if the Canadian company was quietly working with any other Australian distributors.

Cannatrek is listed as a licensed importer of medical cannabis on Australia’s Office of Drug Control (ODC) website and recently made headlines when its proposed $160 million production facility near Shepparton was given the green light.

Cannatrek has not responded to multiple requests for comment and Business Insider Australia is not suggesting any wrongdoing by the company.

Asked whether it had any concerns about the CannTrust audit and prospect of illegal cannabis entering Australia, the Therapeutic Goods Administration effectively said it was Canada’s problem.

“The Government of Canada is responsible for authorising all shipments of medicinal cannabis products from Canada to Australia, as required under the Single Convention on Narcotic Drugs 1961,” a TGA spokesperson told Business Insider Australia.

“At this time there has been no notification by the Government of Canada to Australia of any issues with shipments of medicinal cannabis products from Canada.”

The TGA said it will continue to “monitor” the situation.

‘Not good enough’

If cannabis grown in the five unlicensed CannTrust rooms did reach Australian shores, it’s actually a really big deal, said Rhys Cohen of Cannabis Consulting Australia.

“This is a serious international issue and essentially means the government-approved import of illicit substances to Australia,” said Cohen, who was formerly a senior project officer at the Lambert Initiative for Cannabinoid Therapeutics at the University of Sydney.

And that’s assuming the product itself is pesticide-free, which Danish company StenoCare is not so sure of — otherwise there is an additional health and safety concern as well as a legal one.

While he makes clear that the Australian government probably couldn’t have prevented the import of illegal cannabis, Cohen also said its reponse could have been better.

“This is a Health Canada problem,” he said. “But [the TGA] could have been more responsive given the potential health risks to vulnerable Australians. To simply say that they haven’t been notified by the Canadian authorities is not good enough.”

Keeping it local

Cohen explained that “routine batch testing” is not conducted on imported cannabis in Australia, with the responsibility lying with exporters.

The case shows the risks Australia faces relying on exporters to comply with the law, which begs the question: why are we even importing cannabis in the first place?

US-based cannabis executive Kevin Smith recently said Australia’s “reputation for best agricultural practices, crop safety management systems and robust quality control” make it an ideal location for the cultivation of cannabis — so you’d think we’d simply avoid the headache of overseas suppliers and grow it here instead.

According to Cohen, there’s a simple — if frustrating — answer to the question.

“The need to import cannabis to Australia is due to regulatory failure restricting local production,” he said.

“The ODC has been underfunded and dysfunctional since the beginning. Licences frequently take more than a year to process and there are dozens of cases to prove that.”

Documents obtained by The Australian newspaper under Freedom of Information laws back up Cohen’s suggestion, showing government auditors found the level of resourcing at the ODC — which hands out and monitors cannabis licences in Australia — to be “unsustainable”.

Until it solves this problem, the government might find itself in the embarrassing position of illegally importing weed more often.

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