CannTrust CEO was warned over illicit pot growing: former compliance worker
TORONTO –
A former director of high quality and compliance at CannTrust Holdings Inc. says he warned the corporate’s chief government that Health Canada might levy penalties if the agency grew pot in unlicensed rooms at its Niagara, Ont. facility.
In the months main as much as Health Canada discovering pot rising in unlicensed rooms, Graham Lee mentioned Tuesday that he instructed Peter Aceto he could not say what the precise penalties could possibly be, however knew the federal government regulator had beforehand issued warning letters and handed out penalties.
For instance, Lee mentioned Health Canada reviewed CannTrust’s stock extra extensively after it found the corporate utilizing a storage facility at its Vaughan, Ont. location opposite to licensing.
“In general, Health Canada was there every day checking up on the inventory,” Lee recalled.
His feedback have been made on the Old City Hall courthouse in Toronto in response to questioning from Dihim Emami, a lawyer representing the Ontario Securities Commission (OSC) in a case aiming to show Aceto and different former CannTrust executives are responsible of a number of offences associated to unlicensed rising on the Niagara facility.
Aceto, former CannTrust chairman Eric Paul and former vice-chairman Mark Litwin have pleaded not responsible to fraud and authorizing, allowing or acquiescing within the fee of an offence.
Litwin and Paul are additionally dealing with insider buying and selling fees, and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.
The OSC and Royal Canadian Mounted Police allege Litwin, Aceto and Paul didn’t speak in confidence to buyers that about 50 per cent of the rising house at CannTrust’s Pelham, Ont. facility within the Niagara space was not licensed by Health Canada. They say the boys used company disclosures to claim that they have been compliant with regulatory approvals.
They additionally allege that Litwin and Aceto signed off on prospectuses used to lift cash within the U.S., which acknowledged that CannTrust was totally licensed and compliant with regulatory necessities, and that Litwin and Paul traded shares of CannTrust whereas in possession of fabric, undisclosed info concerning the unlicensed rising.
The males not work for CannTrust and their legal professionals are arguing their purchasers are all harmless.
Frank Addario, Aceto’s lawyer, beforehand instructed The Canadian Press his consumer was employed due to his monetary acumen and monitor file. Before his time at CannTrust, Aceto was the president and chief government of ING Direct Canada.
Addario additionally identified that CannTrust was topic to inspections and monetary audits that uncovered no materials points.
“The evidence will show Peter Aceto behaved legally and with integrity during his time at CannTrust,” Addario mentioned in an e mail.
However, Lee testified Monday that the expansion of hashish in unlicensed rooms was “very openly discussed” on the pot firm.
“There was no hiding this. There was no denial of this,” he mentioned.
On Tuesday, he strengthened these allegations, describing how he introduced up his considerations about unlicensed exercise throughout a minimum of one assembly in winter 2019 that he recalled Aceto attended.
“I noticed that no one in the room was referring to or cognizant of the fact that these were unlicensed areas, so I reminded them,” Lee mentioned.
This report by The Canadian Press was first revealed Dec. 6, 2022.
