CannTrust Holdings Inc. said it has terminated Chief Executive Officer Peter Aceto "with cause" and has forced the resignation of chairman Eric Paul amid a deepening scandal over cannabis plants being grown in unlicensed rooms.
The special committee of the board investigating the Canadian cannabis grower said the high-profile departures
The company said in a statement, “The investigation into the company's non-compliance with Health Canada regulations and ancillary matters uncovered new information has resulted in a determination by the board to terminate with causes.
"In addition, the board of directors demanded the resignation of the company's Eric Paul and he complied chair."
CannTrust said it had made a voluntary disclosure to health Canada based on the new information, and will "fully cooperate with the regulator in an open and transparent manner to resolve these matters fully and expeditiously."
Director Robert Marcovitch will take on the role of interim CEO, and Mark Dawber has been the head of the board committee probing the situation that has prompted massive drop in the company value market.
The executives have been made aware of health issues Canada regulations at southern Ontario growing facility in November 2018, seven months before the regulator uncovered the illegal practice.
CannTrust chairman, CEO was informed in November of unlicensed cannabis growing, e-mails show
CannTrust shares plummet after Globe report that executives were told of unlicensed growing
Mr. Paul is a founder and major shareholder at CannTrust, one of Canada's largest marijuana producers. He stepped aside as CEO in October 2018 to make room for Mr. Vinegar, who had previously been head of Tangerine Bank. Neither has publicly acknowledged knowing about plants being cultivated in unlicensed rooms.
The company said that it had to determine what the impact of the situation would be on financial results.