Peter Aceto, Eric Paul and Mark Litwin, who were CEO, president and vice president respectively of the cannabis producer, issued their not guilty pleas Monday – the day of the fourth anniversary of the legalization of recreational cannabis in Canada – at the Ontario Court of Justice, Toronto Courthouse .

MM. Aceto, Paul and Litwin are charged with fraud and committing a criminal offense.

MM. Litwin and Paul also face insider trading charges, and gentlemen. Litwin and Aceto for preparing a false prospectus and false preliminary prospectus.

These charges come more than three years after CannTrust announced in July 2019 that Health Canada had discovered unauthorized cultivation at its Pelham, Ontario facility. This extension took place between October 2018 and March 2019, while the five rooms concerned only received the relevant licenses in April 2019.

Charges against the three men were filed in June 2021 after months of investigations by the Ontario Securities Commission (OSC) and the Royal Canadian Mounted Police (RCMP). The two agencies noted that the men allegedly failed to tell investors that about 50% of the acreage at the facility had not been licensed by Health Canada.

According to the OSC and RCMP, the men used the company’s disclosures to claim that CannTrust, based in Vaughan, Ontario, is compliant.

They also claim that gentlemen. Litwin and Aceto allegedly signed prospectuses used to raise funds in the United States, stating that CannTrust was fully licensed and in compliance with regulatory requirements and that Messrs. Litwin and Paul allegedly traded CannTrust stock while in possession of material undisclosed information regarding the unauthorized cultivation.

Mr. Aceto was fired for cause by the Board of Directors of CannTrust in July 2019, around the same time that Mr. Paul was asked to resign. Mr. Litwin resigned in March 2021.

The three defendants claim to have always respected the law. None of the allegations were proven in court.

MM. Some of the charges against Aceto, Litwin and Paul were dropped back in May when the OSC dropped the charges alleging false or misleading statements in press releases.

Quasi-criminal charges like the ones they still face could result in a prison sentence of up to five years less per day, a fine of up to five million for each conviction, or both.

CannTrust has since rebranded to Phoena Holdings. After revelations about unlicensed grow rooms, it was delisted from the Toronto Stock Exchange and sought protection from its creditors in court.

It broke from those protections in March and is attempting a comeback after receiving 17 million funding from a subsidiary of Dutch private equity firm Kenzoll BV