The regulator's lawyer Dihim Emami made the admission on Wednesday at
Lawyers for the three men are instead seeking an acquittal, which would see their clients freed of charges linked to the alleged unlicensed growing of thousands of kilograms of pot at
“I can’t tell you how much anxiety there is among the defendants about the end of this matter for the reasons that you can imagine,"
Aceto, Paul and Litwin pleaded not guilty in October to several offences related to a failure to disclose unlicensed growing at the facility to investors.
The OSC also claimed the men used corporate disclosures to assert that they were compliant with regulations. They alleged Litwin and Aceto signed off on prospectuses used to raise money in the
They were each charged with fraud and authorizing, permitting or acquiescing in the commission of an offence.
Litwin and Paul were also facing insider trading charges, and Litwin and Aceto were charged with making a false prospectus and false preliminary prospectus.
Since hearings in the matter began in the fall, the court has heard from the current chief executive of CannTrust, now called
Lee shared that growing in unlicensed rooms was "very openly" discussed at the company, including in front of some of the accused executives.
He also testified that
At least one of the times was due to odour complaints, but Lee also suspected
In the summer of 2019, Lee said Lalonde messaged him on LinkedIn asking if
“You may reply if you like or I can ask
Lee didn’t respond to the message, but
"What, if anything, did they ask you?" Emami questioned Lee.
"They asked me if plants had been put into the unlicensed rooms, and they had been told other things earlier in the day...and so I clarified for them that, yes, they had been."
But in cross-examination last week, lawyers turned up evidence suggesting the Niagara facility had some licenses, making it difficult for the OSC to prove its central allegations of unlicensed growing.
During Fenton's cross-examination of Lee, the lawyer presented the witness with a licence for the facility issued under the Cannabis Act and
The license listed "standard cultivation and standard processing" as authorized activity at the lone building on
Emami said Lee was not shown the license in a pretrial interview the OSC completed with him.
Fenton also presented Lee with an
"But you told everybody that you're now licensed," said Fenton to Lee.
"Yes," replied Lee.
"And used the wrong terminology?" said Fenton
"Yes," Lee admitted.
"Were you confused regarding the operation of the Cannabis Act and its regulations?" Fenton said.
"At times," said Lee.
The defendants' lawyers and the OSC refused to comment on the matter beyond what was said in court Wednesday.
Before the case got underway, Fenton told The Canadian Press his client "maintains that he acted in compliance with all applicable laws and looks forward to establishing his innocence at trial.”
Addario pointed out his client was hired because of his financial acumen and track record, and said the company was subject to inspections and financial audits that uncovered no material issues.
"The evidence will show
The quasi-criminal case was due to stretch until May with dozens of witnesses, but could wrap up this week, should the judge agree to an acquittal or the charges are dropped.
Emami asked the court Wednesday to adjourn the matter until Thursday, so he could review case law Litwin's lawyer Fenton said would support the case being wound up.
“I am respectfully against dragging this out," Fenton said.
"The prosecution has determined they can’t prove the case. It is time to end it and it should end today.”
The defendants, along with a dozen family members and friends who consistently appeared at hearings over the last few months, were present as Fenton spoke. OSC enforcement director
The quasi-criminal case is key for the OSC because it is the regulator's first court proceeding involving a publicly traded cannabis company.
Industry observers felt that if it ended with a strong ruling in favour of the financial regulator, the case could deter other pot companies from skirting the law.
"If there aren't significant consequences (for
This report by The Canadian Press was first published Dec.14, 2022.
© 2022 The Canadian Press. All rights reserved., source