Lawyers for the Ontario Securities Commission (OSC) moved this week to withdraw all charges against former CannTrust Holdings Inc. officials Peter Aceto, Eric Paul, and Mark Litwin, according to a CBC report.
“After careful review of the evidence during the trial, we are of the view that as charged, there is no reasonable prospect of conviction.” — OSC attorney Dihim Emami, in a statement
The trial, which began in October, was tied to alleged compliance failures at CannTrust. Regulators suspended CannTrust’s cannabis operations license in 2019 after accusing the company of growing and selling cannabis in unlicensed rooms and failing to maintain proper documentation of its business. Prosecutors charged the company executives with securities offenses related to telling investors that CannTrust’s grow facility was fully prepared and operational.
But during trial testimony, defense attorneys argued that CannTrust’s full greenhouse was in fact licensed. Additionally, per Health Canada regulations outlined in cross-examination by CannTrust’s former director of quality and compliance, there were no restrictions on which rooms CannTrust could use to grow cannabis, undercutting the prosecution’s case, the report said.
Defense attorneys for the embattled cannabis executives have asked prosecutors to go beyond simply dropping the charges and order full acquittals for their clients but Emami asked for additional time to consider the request.
Since the suspension of its license and through the resulting trial, CannTrust — once valued at $1.5 billion through the New York and Toronto stock exchanges — has declared bankruptcy, sold off most of its assets, and changed its name to Phoena Holdings Inc.
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