The Laws are Clear on Illegal Cannabis Activity, but How They Will Be Applied is Not – LPC

CannTurst faces charges related to illegal cannabis activity.
CannTrust ex-CEO Peter Aceto, left, in front of what Health Canada believes to be one of five unlicensed growing areas.

CannTrust Inc. could be facing fines while those who work there could face jail time for illegal cannabis activity. However, there are a lot of coulds and ifs – nobody is quite sure how the legal story will unfold.

“We’re in uncharted territory,” said cannabis lawyer Trina Fraser. “The potential for people to go to jail certainly exists. The potential for significant fines to be levied certainly exists.”

Health Canada launched a probe into the company to investigate possible illegal cannabis activity. The probe stems from the discovery of five unlicensed rooms, which ultimately led to a production licence suspension and halted sales.

The Ontario Securities Commission has since directed the Joint Serious Offences Team to launch its own investigation into illegal cannabis activity. CannTrust also faces possible legal action in the US because it is listed on the New York Stock Exchange.

In reaction to the growing scandal, CannTrust announced in July the removal of CEO Peter Aceto and chair Eric Paul.

In matters related to the Cannabis Act, Health Canada wouldn’t directly lay charges, the agency told the National Post. “It is law enforcement that has the authority to take action against illegal cannabis activity under Division 1 of the Act and against those who operate outside of the legal framework.”

Would CannTrust’s Actions Make It a Black Market Producer? – LPC

One of the questions the alleged illegal cannabis activity raises is whether or not CannTrust would be considered a black market producer.

“Under the Cannabis Act, based on the allegations I’ve read, if those were proven by Health Canada to be true, they could potentially lead to a lot of different types of offences: Illegal cultivation, illegal possession, illegal sale,” Fraser said.

However, Health Canada seems to indicate that there’s a difference when a licensed producer is undertaking an illegal cannabis activity. “(Division 1 of the Cannabis Act is) primarily intended to address situations where possession, production, distribution, sale, and import/export of cannabis takes place outside the legal system, for example by unlicensed individuals or organizations.”

Jack Lloyd, a lawyer in Toronto, said that technically all the workers could be open to criminal prosecution for illegal cannabis activity. “All of the workers could be charged with illegal cultivation,” Lloyd said.

Still, that is likely an extreme scenario. “I think they’ll probably get a big fine,” he said. “Health Canada will say, ‘You’ve got to hire new people, hire new security.’ They’re going to be subject to spot checks. They’re going to be subject to intense scrutiny.”

Whatever happens – or doesn’t happen – in the CannTrust case will set a precedent for future legal battles involving illegal cannabis activity.

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