Executives dismissed from beleaguered Winnipeg cannabis producer after product recalls

A Winnipeg-basedcannabis producer has been stripped of its senior management team after a third-partyinvestigation found the company sold unauthorized productin Saskatchewan.

George Robinson, the contractorhired to investigate the troubled company facing two Health Canada recalls, said the three Bonifyexecutives were alsoaccused of bullying and threateningstaff workers who tried to speak up.

"I don't know what their motivation and driver is, but what they did was not at all remotely close to following the regulations," said Robinson, chief executive ofRavenQuestTechnologies Inc, of the top executivesduring a 50-minute news conference Thursday in Winnipeg. He decried theconduct of the executives as "creative entrepreneurialism."

Robinson saida number of front-line stafftried to speak out about the 200 kilograms of unlicensedcannabis that arrived at its Winnipeg production facilitybutwere pressured to look the other way.

"That's a real, sad position to put really, good quality people in, but sometimes they make the choice to protect their families, their livelihood and we don't hold them accountable for those forced decisions," he said. "In fact, we continue to support them."

Complaints about the unauthorized cannabis eventually reachedsenior managers and the company's board of directors.

Earlier this month, Health Canada issued a recall of two Bonify strains over contamination issues that were sold at three Saskatchewan retailers Cannabis Co. in Regina, Spiritleaf in Moose Jaw and The Pot Shack in Saskatoon.

Robinson confirmed Thursday the product was unauthorized, containingtraces of bacteria, yeast, mould and the unconfirmed presence of E.coli. He refused to call the products "illegal" or "illicit."

Manitoba's cannabis regulators proceeded to yankall Bonify products from stores as a precaution last week, but Robinson said the irregular product was never sold inthe province.

The consultant said he was not aware of the source of the unauthorized cannabis or whether organized crime played any role.

The three executives, whom he would not name, were terminated with cause and an executive assistant was dismissed. One member of the board of directors has been suspended, Robinson said.

Bonify may have 'overpromised'

He said it appears Bonifysold unapproved cannabis because it felt pressureto satisfy its supply agreements with Saskatchewan and Manitoba.

"I think there was some overpromising happening," Robinson said.

Health Canada is investigating what went wrong, but he said he was not aware if police authorities were also probing the company. Robinson said it would be up tofederal and provincial regulators to alert police.

If any charges are laid, he expects it to be "precedent-setting," as these errors arenew territory for Canada's licensed cannabis sector.

Of the unauthorized marijuanasent to Saskatchewan, 52 packages of 3.5 grams eachmade it to market, all of which were sold.

Outside one of those stores, aSpiritleafoutlet in Moose Jaw, co-owner Mandy Fisher expressed relief that a federal department was investigating.

"The reason Health Canadais keeping a close watch on it is to keep the consumers safe, andthat's our goal in the store, too," she said. "[I'm] definitely not happy to hear that we got product that wasn't supposed to be here."

The majority of the unauthorized shipment never left the Winnipeg production facility and was never sold in Manitoba, Robinson said.

A secondrecall notice affecting Bonify,issued on Christmas Eve, removed 14 additional lots ofBonifydried cannabis from Manitoba and Saskatchewan.

The stock was targeted for labelling and record-keeping issues and was not amongthe shipment under investigation for being unauthorized, Robinson said.

Nearly 5,900 units of these products were sold in Manitoba and at two Saskatchewan retailers.

Retail sales restricted

Robinsonsaid Bonify voluntarily choseto suspend all retail sales in Saskatchewan and is no longer selling medicinal cannabis as the company tries to restore regulators' confidence.

He acknowledgedit will take time for Bonify to restore the trust itlost, but he believes they can right the ship. They had a stellar record until an unexplained "cultural change" before recreational cannabis was legalized on Oct. 17 altered course for the company.

RavenQuest will be providing management services for the company for at least the next three months, Robinsonsaid.

"We want to build that trust again with the patients and with the consumersto say that this was an anomaly that happened," he said. "We've corrected it very quickly and decisivelyand we're going to move forward."