Bradford Today reports..
TORONTO — Industry observers say cannabis companies’ future regulatory compliance is at stake as a case against three former leaders of CannTrust Holdings Inc. begins.
Charges were first laid by the Ontario Securities Commission in June 2021, about three years after CannTrust was found to be growing thousands of kilograms of cannabis in unlicensed rooms.
The case — the OSC’s first court proceeding involving a publicly traded cannabis company — is scheduled to begin at the Ontario court of justice in Toronto on Monday. If it ends with a strong ruling in favour of the financial regulator, many believe the case could deter other pot companies from skirting the law.
“When this whole CannTrust thing came out, it caused a lot of people to pause and stop cutting corners that they were cutting before because they were concerned for what might happen,” said Matt Maurer, a partner at Torkin Manes LLP and co-chair of its cannabis law group.
“If there aren’t significant consequences (for CannTrust’s former leaders), I could see some companies … saying, ‘Wow, we just shuffle this here and do that there and we’re so much further ahead, what’s really going to happen? Just look at CannTrust.'”
The CannTrust case focuses on Peter Aceto, Eric Paul and Mark Litwin, the company’s former chief executive, chairman and vice-chairman, who face charges of fraud and of authorizing, permitting or acquiescing in the commission of an offence.
Litwin and Paul are also charged with insider trading and Litwin and Aceto are accused of making a false prospectus and false preliminary prospectus.
Neither the OSC nor lawyers for Paul would not comment on the matter.
Litwin’s lawyer, Scott Fenton, said only that his client “maintains that he acted in compliance with all applicable laws and looks forward to establishing his innocence at trial.”
Read full report