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Summary
- Canopy Growth Corporation (TSX:WEED), along with a few other licensed pot producers, has come under the microscope following certain complaints.
- Reports say that national healthcare regulator Health Canada is currently evaluating the labelling requirements of pot companies.
- Canopy Growth stocks are currently in the red, down nearly seven per cent in March to date.
Canopy Growth Corporation (TSX:WEED), along with a few other licensed pot producers, has come under the microscope following accusations of inaccurately labelling the potency levels of some of its cannabis products. Reports say that national healthcare regulator Health Canada is currently evaluating the labelling requirements of such companies.
Canopy Growth stocks are currently in the red, down nearly seven per cent in March-to-date. In February alone, the shares slipped by about 18 per cent.
Let’s dive in to learn more about the Health Canada investigation.
Canopy Growth – Health Canada Probe
The Health Canada probe comes after Canopy Growth Corporation faced the heat of several complaints regarding the potency level display on its TWD brand products. According to media reports, fellow pot firm Pure Sunfarms has submitted a complaint saying that TWD brand products do not come with “flat 20 per cent tetrahydrocannabinol potency” as they claim to in their labels.
©Kalkine Group 2021
The potency level of a cannabis product is considered to be a critical factor among Canadian users, and the preferred benchmark is set at above 20 per cent.
Even as producers aim to achieve the potency level of over 20 per cent, there is reportedly more than a billion grams of cannabis stored away by different licensed manufacturers for not meeting the quality standards.
Canopy Growth is yet to put out an official statement on the matter. As of now, the Smiths Falls-based pot firm holds a market cap of over C$ 14.7 billion, as per TMX.
The probe comes around at the same time as Health Canada’s reignited efforts to tighten the rules around individual medicinal pot growers to staunch the rising black markets trading.
Health Canada said on Monday that recent police raids have shone a light on how some pot license holders were helping large-scale illegal production units.
The government agency appears to be pulling the reigns as Canada’s pot market continues to suffer from illegal producers making more annual sales than licensed manufacturers.
