CannTrust employees work with cannabis products at their packaging and extraction facility in Vaughan, Ont., on Wednesday, Dec. 19, 2018. CannTrust Holdings Inc. says it will create a $50-million trust to settle claims from class action lawsuits filed after the company was found growing cannabis in unlicensed rooms two years ago. THE CANADIAN PRESS/Nathan Denette

CannTrust to create $50M trust to settle lawsuits, signs restructuring agreement

CannTrust to create $50M trust to settle lawsuits, signs restructuring agreement

VAUGHAN, Ont. — CannTrust Holdings Inc. says it will create a $50-million trust to settle claims from class action lawsuits filed after the company was found growing cannabis in unlicensed rooms two years ago.

The Vaughan, Ont. business says the trust is part of a restructuring support agreement it reached with Canadian and American plaintiffs to sort out securities claims they made against CannTrust.

The plaintiffs previously banned together as a consortium to file lawsuits complaining they lost millions of dollars after CannTrust allegedly made misrepresentations about having necessary licenses for growing.

The plaintiffs discovered they had been misled in 2019 when Health Canada uncovered illicit cultivation at CannTrust’s Pelham, Ont., greenhouse, seized cannabis from the facility and stripped the company of its licenses, some of which it has since regained.

CannTrust says its new agreement with plaintiffs will be part of a broader restructuring the company and its subsidiaries will undergo as they remain under Companies’ Creditors Arrangement Act protection.

The company says the agreement will resolve claims against CannTrust and lawsuit defendants including chief executive Greg Guyatt and other senior staff.

“Today’s announcement represents a significant milestone towards the resolution of substantially all of the civil litigation claims that were filed against CannTrust following the Company’s non-compliance with certain Health Canada regulations,” said Guyatt said in a statement.

“Although much work remains to conclude the matters contemplated by the RSA, I am pleased that, in addition to relaunching our medical and recreational businesses, we are also making further tangible progress to exit from the CCAA and put CannTrust in a position to be a successful player in the cannabis industry.”

This report by The Canadian Press was first published Jan. 20, 2021.

The Canadian Press

marijuana

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A candlelight vigil will be held in Red Deer on Thursday to honour the 350-plus people killed in the Easter bombing attack in Sri Lanka. Contributed photo
Candlelight vigil planned for deaths linked to Olymel COVID-19 outbreak

A candlelight vigil is being planned for those who died due to… Continue reading

Red Deer Rebels forward Jaxsen Wiebe battles Calgary Hitmen forward Cael Zimmerman for a loose puck when the two teams squared off in February last season. (Photo by BYRON HACKETT/Advocate Staff)
Calgary Hitmen shutout Red Deer Rebels

Rebels name centre Jayden Grubbe team captain ahead of Friday’s game

Traffic will be delayed on 40th Avenue and 19th Street until the end of February. (Advocate file photo).
Traffic delays expected downtown this weekend

Red Deer drivers will be delayed in the downtown area of the… Continue reading

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

Harley Hay
Harley Hay: Just don’t call it cod liver oil

Many people swear that a daily dose of various vitamins is an… Continue reading

Email editor@auburn-reporter.com
Letter: Preserving green spaces in Red Deer

The Advocate published an article Feb. 11 about Sunnybrook residents concerned about… Continue reading

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Los Angeles Kings head coach Darryl Sutter, top, is shown on the bench after NHL action against the Clagary Flames  in Calgary, Alta., Thursday April 9, 2015. Sutter says he has "unfinished business" as he returns to coach the Calgary Flames. THE CANADIAN PRESS/Larry MacDougal
Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Walter Gretzky talks to people while at the funeral of Celtic music legend John Allan Cameron at St. Isaac Jogues Church in Pickering, Ont., Monday, Nov. 27, 2006. THE CANADIAN PRESS/Nathan Denette
‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

Jordan Spieth follows his approach shot to the ninth green during the second round of the Arnold Palmer Invitational golf tournament Friday, March 5, 2021, in Orlando, Fla. (AP Photo/John Raoux)
Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Team Canada skip Brad Gushue makes a shot as he plays Team Ontario at the Brier in Calgary, Alta., Friday, March 5, 2021.THE CANADIAN PRESS/Jeff McIntosh
Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Switzerland's celebrates after the final match at the Women's Curling World Championship in Silkeborg Denmark Sunday March 24. 2019. The 2021 world women's curling championship is back on the curling calendar. THE CANADIAN PRESS/AP, Ritzau Scanpix - Henning Bagger
Women’s world curling championship back on calendar, added to Calgary bubble

Women’s world curling championship back on calendar, added to Calgary bubble

Most Read