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Agrima Botanicals granted an extension to present why it's licence should not be revoked


Ascent Industries (CSE: ASNT) reports its wholly-owned subsidiary and Health Canada license holder Agrima Botanicals has been granted an extension from November 26th until December 17th to present its case why its producer-dealer's licence should not be revoked. The market liked this development and the stock moved a little higher. But again, I will play devil’s advocate.

  1. It is hard to tell whether a three week extension will help without knowing the nature of the transgression. Depending on the nature of Health Canada’s issue(s), three weeks of additional time, may not help much.

  2. A three week extension is not necessarily a concession from Health Canada. If Health Canada is going to take the extreme action of revoking a license, they have to appear completely fair. So to me, it doesn’t tell us anything about the ultimate decision.

  3. As we are talking about tax loss selling, it is fair to conclude ASNT is in a loss position for the vast majority of its shareholders so tax loss harvesting could create some additional selling between now and December 27th.

I believe it makes perfect sense for Health Canada to revoke Ascent’s licenses and challenge them to go through the licensing process again. This will provide Health Canada with an opportunity to assess the new application in great detail as they do with all applicants. I believe Ascent will qualify for a new license.


It is still possible that an existing LP in good standing will acquire ASNT but I also think Health Canada wants to go through the judicial review process. So under my scenario, they will be acquiring an unlicensed operator. The advantage to Ascent and its shareholders is the relicensing process will happen much faster especially if it is a major Licensed Producer. From my point of view, such a takeover will happen above current ASNT prices but it will be far from a bailout for most shareholders.


In any event, we will only have to wait just over two weeks longer to find out how it will all shake out.

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