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Locke Lorde Blog Post See Canntrust Investigation: Risks Abound For Cannabis Companies In Highly Regulated Industry

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Locke Lorde Blog Post See Canntrust Investigation: Risks Abound For Cannabis Companies In Highly Regulated Industry

Authored by holz | Aug 5, 2019 | Enforcement | Canada

The Ontario Securities Commission (OSC) has opened an investigation into CannTrust Holdings, Inc., deepening the problems for the large Canadian cannabis company. CannTrust also announced that it will miss the deadline to file its interim financial reports for second quarter 2019.

CannTrust’s troubles began last month when regulator Health Canada alleged that CannTrust was engaged in unlicensed cultivation at its facilities. Specifically, Health Canada alleged that CannTrust was cultivating marijuana in five unlicensed rooms and put a hold on 5,200 kilos of dried cannabis (estimated value of $38.6 million) derived from those rooms. In response, CannTrust stopped all sales and shipments of its products on July 11, 2019 and fired its CEO Peter Aceto. Chairman Eric Paul resigned upon request of the board of directors. Now, the Joint Serious Offences Team from the OSC will be poring over CannaTrust’s financial records and looking for fraud, market manipulation, and other financial offenses. A securities fraud class action lawsuit filed against CannTrust on July 8, 2019 also remains pending.

Source: https://cannabislaw.report/locke-lorde-blog-post-see-canntrust-investigation-risks-abound-for-cannabis-companies-in-highly-regulated-industry/

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