Prosecutors with the Ontario Securities Fee (OSC) instructed a Canadian court docket on Wednesday that that they had no cheap expectation of gaining a conviction in opposition to three former executives of the hashish agency CannTrust Holdings and requested to withdraw fees in opposition to 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 choose for a full acquittal within the case.
“After cautious overview of the proof throughout the trial, we’re of the view that as charged, there is no such thing as a cheap prospect of conviction,” OSC lawyer Dihim Emami told Victor Giourgas, the choose presiding over the case.
The case concerned allegations that Aceto, Paul and Litwin had overseen the unlawful cultivation of 1000’s 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 totally licensed to domesticate hashish till April 2019.
“Our crew has centered on constructing a tradition of transparency, belief and excellence in each side of our enterprise, together with our interactions with the regulator,” Aceto said on the time in an announcement from CannTrust. “We’ve made many modifications 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 had been totally compliant with rules. Aceto, Litwin and Paul had 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 traders. Litwin and Paul had 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 had been made public. Moreover, Litwin and Aceto had been charged with making a false funding prospectus and a false preliminary prospectus.
Testimony Reveals Weak spot 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 workers 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 crops 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, that they had been,” Lee testified.
As a part of his testimony, Lee additionally mentioned that CannTrust workers had as soon as staged images taken as a part of a regulatory submission to Well being Canada in an try and obscure the aim of the additional develop rooms. However he additionally famous that the workers had not been instructed by senior administration to take action.
Throughout cross-examination, protection attorneys introduced 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, introduced Lee with an April 5 e mail he despatched to others at CannTrust, wherein he wrote, “Please discover connected, we at the moment are licensed for the entire remaining excellent Niagara areas.”
“However you instructed all people that you simply’re now licensed,” Fenton mentioned to Lee.
“Sure,” Lee answered.
“And used the improper 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 choose to drop the fees in opposition to the defendants. However their legal professionals requested Giourgas to completely acquit the previous CannTrust executives of the fees in opposition to them.
“I’m respectfully in opposition to dragging this out,” Fenton said. “The prosecution has decided they’ll’t show the case. It’s time to finish it, and it ought to finish at present.”
“I can’t inform you how a lot anxiousness there’s among the many defendants concerning the finish of this matter for the explanations imaginable,” added Frank Addario, Aceto’s lawyer.
Prosecutor Emami requested for extra time, saying he had obtained the request for acquittal that day. The defendants had been due again in court docket on Thursday for the choose’s resolution on the movement to acquit.