CannTrust fires CEO, board chair resigns
By Greenhouse Canada
By Greenhouse Canada
CannTrust has fired CEO Peter Aceto and board chair, Eric Paul has resigned.
These events transpired after the Globe and Mail revealed that executives were aware of unlicensed grow rooms, reports the Financial Post.
According to a CannTrust release, investigation into the licensed producer’s non-compliance with Health Canada regulations has uncovered new information that resulted in the board’s decision.
A special committee of its board of directors is forging on with its ongoing investigation.
In the meantime, chair of the special committee, Robert Marcovitch, will step down from the committee and into the role of interim CEO. Marcovitch was most recently the president and CEO of K2 Sports, an international developer, manufacturer, marketer and distributor of winter sports equipment. He was previously the Chief Executive Officer at The Coleman Outdoor Company from 2011 until 2015, and prior to that, was Chief Executive Officer and President of Ride, Inc. from 1994 to 1999, which prior to its acquisition by K2 was a large publicly traded company.
“Our first priority is to complete the remaining items of our investigation and bring the company’s operations into full regulatory compliance. Implementing the necessary changes is essential to the interests of our medical patients, customers, shareholders and employees,” says Marcovitch. “CannTrust has a number of strengths it can draw upon to reset and rebuild, including industry-leading research, innovation and intellectual property.”
Mark Dawber has assumed the role of special committee chair. Dawber is a FCPA with significant public accounting experience having been an Audit Partner at Moore Stephens Hyde Houghton from 1971 until 1998 and BDO Canada LLP from 1999 to 2000.
Based on new information uncovered by the investigation, the CannTrust says they made a voluntary disclosure to Health Canada, and will cooperate with the regulator in an open and transparent manner to resolve these matters.
In early July, Health Canada found five unlicensed rooms in CannTrust’s greenhouse facility in Pelham, Ont., as well as inaccurate information provided by the LP’s employees. According to the company, the unlicensed rooms had pending applications with Health Canada but were used for active cannabis production from October 2018 to March 2019. Licences were eventually issues for each room in April 2019.
Health Canada placed a hold on approximately 5,200kg of dried cannabis that was harvested in the previously unlicensed rooms. CannTrust then put a voluntary hold on 7,500kg of dried cannabis at its Vaughan manufacturing facility that was produced in the previously unlicensed rooms.
The company has recently purchased 81 acres of land in British Columbia and expects to secure over 240 acres for low-cost outdoor cultivation, which it will use for its extraction-based products.