CannTrust execs linked to unlicensed growing caused ‘incredible’ damage, court hears

TORONTO – A lawyer representing Ontario's securities regulator says three former executives whose cannabis company was caught growing pot in unlicensed rooms were in positions to disclose the improper growing but didn't.

Dihim Emami, a lawyer for the Ontario Securities Commission, said in a Toronto court today that by not disclosing the unlicensed growing at CannTrust Holdings Inc., Peter Aceto, Eric Paul and Mark Litwin caused "incredible" damage to investors.

The three men have pleaded not guilty to a series of securities offences linked to the unlicensed growing at a Niagara, Ont. region facility, including fraud and authorizing, permitting or acquiescing in the commission of an offence.

Litwin and Paul are also facing insider trading charges, and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.

The charges were first laid by the OSC in June 2021, around the same time executives told shareholders the Vaughan, Ont. company was compliant with regulations.

The three men no longer work for CannTrust, which is now called Phoena Holdings Inc., and maintain they have always complied with the law.

This report by The Canadian Press was first published Nov. 28, 2022.