Former CannTrust compliance worker says unlicensed growing ‘very openly’ discussed

TORONTO –

A former director of high quality and compliance at CannTrust Holdings Inc. says 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,” Graham Lee advised the Ontario courtroom of justice’s Old City Hall courtroom on Monday.

The problem was mentioned on a number of events, even with members of the senior management group, Lee added.

His remarks come as three former executives on the hashish firm face a sequence of securities offences linked to unlicensed rising that allegedly occurred at a Niagara, Ont. space facility owned by CannTrust, which is now referred to as Phoena Holdings Inc.

Peter Aceto, Eric Paul and Mark Litwin have pleaded not responsible to fraud and authorizing, allowing or acquiescing within the fee of an offence.

Litwin and Paul are additionally going through insider buying and selling prices, and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.

Aceto, who served as CannTrust’s chief government till he was terminated with trigger in 2019, was conscious of the unlicensed rising and the pair mentioned it at a 2018 assembly in Aceto’s workplace at CannTrust’s headquarters, Lee stated.

By the time of the assembly, crops had been already being grown in a single unlicensed room and there have been plans to put different crops in one other unlicensed room.

Lee stated Aceto advised him to proceed with the plan as a result of the corporate had “created an internal precedent” by already planting in unlicensed rooms.

Frank Addario, Aceto’s lawyer, beforehand identified his consumer was employed due to his monetary acumen and monitor document (Aceto was beforehand the president and chief government of ING Direct Canada) and stated the corporate 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 stated in an e-mail.

Lawyers for Paul and Litwin, CannTrust’s former chairman and vice-chairman, have additionally maintained their purchasers are harmless. After the unlicensed rising got here to gentle, Paul was ordered to step down and Litwin resigned in March 2021.

Lee’s courtroom look on Monday additionally touched on Health Canada, whose representatives inspected the power, together with one of many unlicensed rooms. Lee remembers employees had been advised to not misinform inspectors and to reply questions from Health Canada employees honestly.

When the inspectors left, Lee wrote an e-mail to different employees saying, “very high level, we dodged some bullets, but are also looking at a significant regulatory review” as a result of Health Canada may have observed the rising in unlicensed rooms.

But Lee was rising uneasy. As these occasions unfolded, he wrote emails to senior CannTrust describing areas of concern, together with the unlicensed rising.

His objective was to “create a paper trail” to “protect myself,” he stated.

He added that he wished proof of what was occurring “because I was under the impression I would be thrown under the bus pretty rapidly.”

This report by The Canadian Press was first revealed Dec. 5, 2022.