B.C. company Adastra overstated cocaine approvals, feds suggest

UPDATE: Adastra has since issued a retraction and clarification. 

The Langley-based cannabis company which has sparked controversy after it announced it was approved to “legally possess, produce, sell and distribute” cocaine may have overstated what it’s allowed to do.

Health Canada says Adastra Labs is licenced “for this controlled substance for scientific and medical purposes only. They cannot sell products to the general public.”

“There are very strict rules in place for obtaining and maintaining a Controlled Substances Licence in Canada,” the agency said in an email to CityNews Friday.

It goes on to explain that Adastra Labs is “only permitted for sale to other licence holders who have cocaine listed on their licence, pharmacists, practitioners, hospitals, or the holder of a section 56(1) exemption for research purposes.”

Health Canada says it has contacted Adastra to “reiterate the very narrow parameters of their licence,” adding if those requirements are not followed, it “will not hesitate to take action, which may include revoking the licence.”

‘I was as surprised as the premier of British Columbia was’

This comes a day after B.C. Premier David Eby expressed surprise that Health Canada had authorized the company to sell cocaine, and had done so without the province’s knowledge.

Weighing in on the situation Friday, Prime Minister Justin Trudeau suggested the company wasn’t entirely clear on what it’s been approved to do.

Trudeau reiterated that the company is limited to using the drug for research — as has been clarified in Health Canada’s email to CityNews.

“I was as surprised as the premier of British Columbia was to see that a company was talking about selling cocaine on the open market or commercializing it. There are limited and very restricted permissions for certain pharmaceutical companies to use that substance for research purposes and for very specific, narrowly prescribed medical purposes. But it is not a permission to sell it commercially or provide it on an open market,” the prime minister said Friday.

“We are working very quickly with this company to correct the misunderstanding that their press release has caused. This is not something that this government is looking at furthering.”

Minister of Mental Health and Addictions Carolyn Bennett has also described “very strict rules” when it comes to obtaining and maintaining a Controlled Substances Licence in Canada, providing CityNews with a statement that mirrors the one issued by Health Canada.

Eby said he was “astonished” by the announcement when asked about the matter Thursday, saying if Health Canada granted the approval, it did so without consulting the provincial government.

Related articles: 

• Langley cannabis company’s approval to make cocaine ‘astonishes’ B.C. premier

• Cocaine controversy: B.C. company Adastra sees stock price surge more than 75%

• B.C.’s drug decriminalization pilot begins

He commented a second time Friday, once again expressing his surprise at Adastra’s announcement.

“I am also wondering what the intention was of Health Canada in granting this licence, especially to a company that apparently so significantly misrepresented the nature of the licence and in the press release that they issued,” he told reporters.

The premier stressed the B.C. government “had not been engaged at all by Health Canada, let alone notified that this had happened.”

“[I’m] further disturbed to hear from Health Canada that they believe the company has significantly misrepresented the nature of the licence, irresponsibly so,” Eby said.

“I think Health Canada needs to have a serious look at what they’re doing, I think they have to have a serious look at this company, and the licence they’ve issued to a company that would issue an irresponsible press release like this. We will continue to work with Health Canada to get answers for British Columbians.”

Amid the controversy created by the company’s announcement last month, Adastra Holdings Ltd.’s stock has surged in recent days, going up more than 75 per cent at times Friday on the Canadian Securities Exchange.

Safe supply in B.C.

In its statement last month, Adastra highlighted B.C.’s decriminalization pilot project, with CEO Michael Forbes saying “harm reduction is a critically important and mainstream topic.”

“…We are staying at the forefront of drug regulations across the board,” he said. “We proactively pursued the amendment to our Dealer’s License to include cocaine back in December 2022. We will evaluate how the commercialization of this substance fits in with our business model at Adastra in an effort to position ourselves to support the demand for a safe supply of cocaine.”

Safe supply is something many advocates have been calling and pushing for amid the toxic drug crisis, which has left more than 11,000 people dead in B.C. since 2016.

When asked whether companies like Adastra could fill a role in creating this supply, Eby doubled down on his previous remarks, taking aim at the firm’s “misrepresentations.”

“We need to be in line with the federal government in addressing the toxic drug supply in our strategy around people that are facing serious addiction issues and we can’t afford missteps. We need public confidence in what we’re doing to keep people alive,” he added, citing things like harm reduction and treatment.

-With files from Charlie Carey