CEN Biotech will be denied a licence to grow medicinal marijuana in Lakeshore, Ont., according to a statement by Health Canada.
The company applied to grow about 590,000 kilograms (1.3 million pounds) of marijuana a year in a production plant off Manning Road.
"Health Canada has in place a rigorous screening process for applicants seeking a license to produce under the Marijuana for Medical Purposes Regulations (MMPR)," a statement from Health Canada reads. "This helps ensure that the operations of Licensed Producers do not pose a safety or security risk to Canadians and to the local communities in which they are set up.
"Based on a thorough assessment in line with the extensive requirements built into the Medical Marijuana Program, Health Canada has advised CEN Biotech of its intent to reject its application."
CEN Biotech has 20 days to provide a reason to Health Canada to change its mind before the decision is final.
Application sent to RCMP
In January, Health Canada confirmed the company's application was sent to the RCMP for further review after a series of Globe and Mail articles called into question the company's investment practices.
"The allegations against this company are deeply concerning. The application is with the RCMP to complete the security assessment, and it won't be going anywhere until all issues are addressed," Health Canada Michael Bolkenius said last month in a statement to CBC News.
The president of CEN Biotech, Bill Chaaban, said the Globe and Mail stories contained unsupported complaints against him and his company and said the paper "misrepresents ordinary business practices as questionable."
In January 2014, Cen Biotech announced it was investing $12 million in a facility in Lakeshore to grow medicinal marijuana.
The announcement received much fanfare from the town and the Windsor Essex Economic Development Corporation.
The company built its Lakeshore facility on Manning Road on a piece of land zoned for agricultural use.
But the company ran into opposition from the public. Police were called in during a public meeting when a debate over the location of the facility became heated.
The town passed a zoning bylaw amendment last year restricting medical marijuana facilities to land zoned for industrial use, a decision CEN Biotech is appealing.
Health Canada told CBC that it has rejected 224 applications to grow medical marijuana and returned more than 600 to applicants due to being incomplete.
About 25 facilities have been approved.