Further to Ascent Industries Corp.’s September 27, 2018 press release, the Company reports that Health Canada (or the “Agency”) has completed its review of the information submitted by the Company in response to the suspension of the Canadian producer’s licence and dealer’s licence issued by the Agency to Agrima Botanicals Corp., a wholly-owned subsidiary of the Company.
Health Canada has advised the responses were not satisfactory to lift the suspension and has issued a letter to Ascent that it intends to revoke Agrima’s licences. In turn, the Company intends to exercise its right to be heard under the Cannabis Act and Cannabis Regulations in order to maintain its licences. Should the Company not be successful in this hearing process, the licences could be revoked.
Health Canada’s review is focused on the period during which the Company was privately held. Health Canada asserts that unauthorized activities with cannabis took place under the Company’s ACMPR license during this period. The Board of Directors has accepted the resignations of Philip Campbell, Reid Parr and James Poelzer, as officers and directors of Ascent, who were the persons directing the Company at the time.
The Company has undertaken additional material actions to resolve this issue:
- The Company has formed a committee of independent directors, led by Mark Brown, to undertake a review of the concerns raised by Health Canada which is underway, and to lead the hearing process with Health Canada;
- The Company has appointed Fasken Martineau DuMoulin LLP as its independent external legal counsel to advise on the hearing process; and
- The Board of Directors has appointed Blair Jordan, the current CFO, as Interim CEO. Before joining Ascent in January 2018 as Vice President, Corporate Development, and assuming Ascent’s CFO role in August 2018, Jordan was Managing Director of Investment Banking at Echelon Wealth Partners Inc. He was previously with Credit Suisse in London, New York, and Tokyo, and was a securities lawyer with Bennett Jones LLP in Calgary.
“We are fully committed to remedying this situation with Health Canada, and ensuring that Ascent operates at the highest level of the industry’s best practices. ” says Jordan, Interim CEO. “The Independent Committee of the Board and I are giving this issue our full attention in order to get Ascent back to its strong growth path to build more capacity, grow our employment numbers, and expand our partnerships in the local community as soon as we can.”