Prosecutors with the Ontario Securities Fee (OSC) instructed a Canadian court docket on Wednesday that they’d no affordable expectation of gaining a conviction towards three former executives of the hashish agency CannTrust Holdings and requested to withdraw expenses towards the boys. However protection legal professionals for former CannTrust CEO Peter Aceto, former chairman Eric Paul and former vice-chairman Mark Litwin have requested the decide for a full acquittal within the case.
“After cautious evaluate of the proof throughout the trial, we’re of the view that as charged, there is no such thing as a affordable prospect of conviction,” OSC lawyer Dihim Emami told Victor Giourgas, the decide presiding over the case.
The case concerned allegations that Aceto, Paul and Litwin had overseen the unlawful cultivation of hundreds of kilograms of hashish for Canada’s regulated market. In July 2019, CannTrust revealed that Well being Canada, the nation’s nationwide well being division and chief federal regulator of the hashish trade, had decided that the corporate’s cultivation facility in Pelham, Ontario was discovered to be non-compliant with some rules. The corporate had accepted the discovering, noting that 5 rooms getting used to develop hashish on the Ontario facility weren’t correctly licensed for cultivation between October 2018 and March 2019. The rooms weren’t absolutely licensed to domesticate hashish till April 2019.
“Our crew has centered on constructing a tradition of transparency, belief and excellence in each facet of our enterprise, together with our interactions with the regulator,” Aceto said on the time in a press release from CannTrust. “We now have made many adjustments to make this proper with Well being Canada. We made errors in judgment, however the classes we’ve got realized right here will serve us nicely shifting ahead.”
The OSC alleged that the defendants claimed in company disclosures that CannTrust’s hashish operations have been absolutely compliant with rules. Aceto, Litwin and Paul have been charged by the OSC and the Royal Canadian Mounted Police with quasi-criminal offenses together with fraud associated to failing to reveal the unlicensed cultivation to buyers. Litwin and Paul have been additionally charged with insider buying and selling for promoting inventory in CannTrust after studying concerning the allegations of unlicensed rising however earlier than they have been made public. Moreover, Litwin and Aceto have been charged with making a false funding prospectus and a false preliminary prospectus.
Testimony Reveals Weak point Of Prosecutor’s Case
Final week, throughout the trial of the three former executives, Graham Lee, a former director of high quality and compliance at CannTrust, testified that Well being Canada employees had inspected the Ontario cultivation in November 2018 and April 2019, however didn’t take any motion associated to the unlicensed develop rooms. However at a subsequent go to, Well being Canada inspectors inquired concerning the unlicensed rooms.
“They requested me if vegetation had been put into the unlicensed rooms, they usually had been instructed different issues earlier within the day…and so I clarified for them that, sure, they’d been,” Lee testified.
As a part of his testimony, Lee additionally stated that CannTrust employees had as soon as staged pictures taken as a part of a regulatory submission to Well being Canada in an try to obscure the aim of the additional develop rooms. However he additionally famous that the staff had not been instructed by senior administration to take action.
Throughout cross-examination, protection attorneys offered proof that the Ontario facility had been licensed to develop hashish that didn’t include any references to particular rooms. The revelation made it tough for prosecutors to show that unlicensed cultivation had occurred on the facility.
Scott Fenton, an legal professional representing Litwin, offered Lee with an April 5 e mail he despatched to others at CannTrust, during which he wrote, “Please discover hooked up, we are actually licensed for the entire remaining excellent Niagara areas.”
“However you instructed all people that you simply’re now licensed,” Fenton stated to Lee.
“Sure,” Lee answered.
“And used the incorrect terminology?” Fenton requested.
“Sure,” Lee admitted.
“Had been you confused concerning the operation of the Hashish Act and its rules?” requested Fenton.
“At instances,” Lee replied.
On Wednesday, prosecutors instructed the court docket that the revelations made throughout the trial made it not possible to safe a conviction within the case and requested the decide to drop the fees towards the defendants. However their legal professionals requested Giourgas to completely acquit the previous CannTrust executives of the fees towards them.
“I’m respectfully towards dragging this out,” Fenton said. “The prosecution has decided they will’t show the case. It’s time to finish it, and it ought to finish at the moment.”
“I can’t let you know how a lot nervousness there’s among the many defendants concerning the finish of this matter for the explanations possible,” added Frank Addario, Aceto’s lawyer.
Prosecutor Emami requested for extra time, saying he had obtained the request for acquittal that day. The defendants have been due again in court docket on Thursday for the decide’s choice on the movement to acquit.