Jul 26, 2019
CannTrust jumps after CEO fired, chairman ousted amid regulatory fiasco
, BNN Bloomberg
CannTrust in 'freefall,' ousts two execs as it looks to return to compliance
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CannTrust Holdings Inc. (TRST.TO) pushed out its two most senior officials late Thursday amid a regulatory controversy that has intensified this week.
The beleaguered cannabis producer announced it has terminated chief executive Peter Aceto with cause, and "demanded" chairman and co-founder Eric Paul resign.
Robert Marcovitch, who was leading the board of directors' special committee that's investigating the scandal surrounding unlicensed production, has been named interim chief executive. He will also step down from the special committee, while director Mark Dawber will take over as its chair.
"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," Marcovitch said in a release.
Paul declined to comment while Aceto was not immediately available when contacted by BNN Bloomberg.
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The management overhaul comes in the wake of evidence showing Aceto and Paul were made aware of the illegal activity at one of CannTrust's facilities last year. BNN Bloomberg obtained documents this week showing Aceto told staff to "continue as planned" with unlicensed planting in November. Meanwhile, The Globe and Mail reported on an email from around the same time that allegedly was forwarded to Paul and that acknowledged Health Canada had missed cultivation in an unlicensed room.
CannTrust said it has made a voluntary disclosure to Health Canada as a result of information that came to light during the committee's investigation, and vowed to cooperate with the regulator.
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