US: Half-ton of poor quality cannabis allegedly called back and returned

The website reported that the company Sundial Growers sold a half-ton of cannabis that was allegedly returned by corporate buyer Zenabis Global because it contained visible mold, parts of rubber gloves and other non-cannabis material, according to people familiar with the matter.

According to the website, the batch of cannabis would be worth roughly C$2.5 million ($1.9 million), assuming a price of C$5 per gram. Sundial has not disclosed that a shipment has been returned; a spokeswoman for the company didn’t return requests for comment. Sundial announced earnings Wednesday morning.

In its own June-quarter report the same morning, Canadian cannabis company Zenabis Global disclosed that it had returned a half-ton of cannabis and terminated its agreement to buy cannabis from a “third party” that it did not name. People familiar with the matter say that party was Sundial, and Zenabis returned the cannabis because it was of poor quality and contained bits of rubber, among other issues.

Sundial did not mention the half-ton return during a road show presentation in Toronto, according to one investor who heard the pitch. In the IPO filing and its quarterly-earnings filing with the Securities and Exchange Commission, the company disclosed about $3.3 million in penalties for not delivering cannabis as promised to partners; those contingencies were from 2018.


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