Regulatory Infraction or Criminal Charge? Licensed Companies and Individuals are Treated Very Differently When it Comes to Cannabis Laws in Canada

Article by Kate Robertson, Growth Op

When management at CannTrust announced on May 29 that a suspended licence had been reinstated for its Niagara cultivation facility, not everyone was happy for the embattled cannabis producer and its employees.

“Throughout this thing, I’ve been absolutely offended by the way CannTrust gets treated differently than ordinary Canadians who would be doing the same thing,” says Paul Lewin of Lewin & Sagara LLP.

While he notes that the company isn’t the only regulated cannabis organization to have had serious infractions since the Cannabis Act came into force in 2018, the claims from a whistleblower’s email to Health Canada in June 2019 seemed particularly reprehensible. Former employee Nick Lalonde said that the producer had been growing cannabis in unlicensed rooms and that he had been asked to hang fake walls to hide the unlicensed grow.

It’s not surprising Health Canada would eventually reinstate the licence. That was the plan outlined by the regulating body in the aftermath, which included the destruction of $77 million worth of non-compliant products; another facility being deemed non-compliant; temporary layoffs of more than 100 employees, and CannTrust being granted creditor protection in March.

But it has also spurred on advocates, particularly those defending individuals and organizations charged with criminal offences under the Cannabis Act. They wonder why so-called “legal” industry members aren’t held to the same standards as their clients.

“I think there’s a good argument that they should be treated more harshly because there was an element of trust involved,” Lewin continues. “And courts always come down harder when you’ve been entrusted by some public authority to do something and you abuse that trust. So they should have been charged under the Cannabis Act right in the beginning.”

Lewin says that if one of his clients had been charged with growing $77 million worth of illicit cannabis, for example, a harsher judge may threaten jail time.

Health Canada senior media relations advisor Tammy Jarbeau points to the Cannabis Act’s compliance and enforcement policy for some explanation as to why, so far, zero licensed companies with serious non-compliance offences have faced criminal charges. The Cannabis Act provides the opportunity for reinstatement of a licence, which she says is consistent with other regulatory programs at Health Canada. If licence holders correct infractions, their licences can be reinstated.

“With respect to CannTrust, following Health Canada’ suspension of its Pelham site in September 2019, the company implemented a series of measures to address the issues that led to the suspension,” Jarbeau says in an email. “These included significant personnel changes by removing senior executives and other employees that were involved in the non-compliances, recovery and destruction of cannabis not authorized by CannTrust Inc.’s licences, implementation of controls, processes and systems to mitigate the risks related to the original suspension, improved record-keeping as well as comprehensive training for all staff.”

Jarbeau said that after carefully reviewing information submitted by CannTrust, Health Canada was satisfied with the actions taken and reinstated the licence (although its licences for a second facility in Vaughan are still suspended for the time being).

Read the full article here.