All but one of Canada's largest marijuana manufacturers have denied MarketWatch that they have done business or taken money from employees tied to organized crime after a bomb report did not mention the names.
Canadian Government Broadcasting Corp., the country's government-sponsored news agency, often referred to as the CBC, released a report Thursday stating that some of the country's major licensed marijuana producers maintain "long-standing relationships" that involve business relationships with members of the mob. In addition to being affiliated with a strong criminal family from Montreal, Quebec, the report also said that one of the major licensed manufacturers has acquired a deal with a drug trafficker. According to the report, this agreement included storage and rental space for a potted plant.
The elimination of mass crime and organized crime from the cannabis business was one of the arguments used by government officials for the legalization of recreational purposes. 1
"A very large proportion of adults in Canada chose to disobey the law, and criminal companies were 100% in control of the market for production distribution and profited billions," said Canadian Minister Bill Blair of Border Security and Prevention of Organized Crime, said MarketWatch President last month in Ottawa.
A Guide to Pot Stocks: What You Need to Know to Invest in Cannabis Companies
Canadians with criminal records are not allowed to purchase licenses for weeds, and the government has licenses in the US Suspended past, this is the case since 2013 because of mob ties.
"Health Canada has found no evidence that organized crime has infiltrated any of the more than 130 state-approved manufacturers," said Eric Morrissette, spokesman for Health Canada, the government agency responsible for licensing weed companies ,
According to Canadian-based author and specialist in organized crime, James Dubro, there is still a healthy black market for weeds in Canada, largely supplied by organized crime equipment led by cyclists and ethnic groups historically persecuted by pirate cigarettes. He said there was no reason to risk the level of scrutiny associated with a public company at the time, but it would not prevent a mafioso from investing wasted profits by relatives.
See also: All Potential Red Flags for Investors in IGC, the Pot Stock That Has Increased by 1,000% Within Three Months
"Mafia itself will not be difficult to put into the pot "Dubro said. "They're bikers, they come in bars and strip clubs and, of course, in marijuana stores. They are everywhere in Toronto and Montreal – there in the harbor, and God knows what else.
The CBC article did not mention the people or companies involved in the mob. Therefore, MarketWatch asked the largest publicly-owned pot producers for market capitalization. They would reject mafia ties on the log. These companies were Canopy Growth Corp.
CGC, + 0.30%
TLRY, + 0.52%
Aurora Cannabis Inc.
ACB, + 4.31%
Cronos Group Inc.
CRON, + 4.68%
CannTrust Holdings Inc.
CNTTF, + 0.95%
TRST, + 0.67%
and Hexo Corp.
HEXO, + 1.63%
HYYDF, + 1.72%
Aphria spokeswoman Tamara Macgregor said the company has no links to organized crime or drug traffickers.
Aurora Cannabis did not respond to several requests for comments.
CannTrust CEO Eric Paul denied that the company had ties to the mob. He said he and a partner founded the business and only took money from friends, family members and institutional investors. CannTrust has made no further acquisitions other than greenhouse investments. "I've been here since the first day, and we're the money people behind things," he said on the phone. Canopy Growth Spokeswoman Caitlin O & #; Hara, wrote in an email: "We are publicly traded because We value transparency Our business is conducted by a carefully audited group of employees with integrity. Any suggestion or suggestion would otherwise be unfounded and reckless.
Cronos Group Spokeswoman Anna Shlimak wrote "No" to any of the MarketWatch requests to investors who had connections to the mob and with whom Mob made business connections and acquired an organization with links to drug traffickers ,
Hexo said in a statement that the company does not control who buys its shares – the responsibility for auditing private investors rests with investment advisers regulated by provincial authorities. "We are also unaware of any organized crime links and would not do business with anyone we knew had such connections," said Isabelle Robillard, communications director of Hexo. Robillard also said that in order to obtain a contract with the Quebec-based state-owned pot retailer, the company has received approval from provincial regulators, which includes an investigation by the Quebec Anti-Corruption and Economic Crime Unit.
Tilray Spokesman Zack Hutson wrote in an e-mail replying to questions of mob ties: "Absolutely not."
As part of the Cannabis Act in Canada, approved manufacturers are subject to background police inspections conducted by Health Canada. Health Canada does not conduct the background checks itself and relies on the Royal Canadian Mounted Police or the Canadian law enforcement agency RCMP, which is similar to the US Federal Bureau of Investigation. She consults various sources of information and databases that are available to her. The results will be transmitted to Health Canada, which will finally decide on a license.
Read: Cannabis is now legal in Canada, but pot companies expect a rocky start.
Important investors in cannabis companies are subject to the same security checks as executives and others, such as B. Members of the Board of Directors licensing applications. "Health Canada has the authority to identify additional positions or persons in an organization who require a security clearance," Morrissette wrote in an e-mail.
The RCMP is investigating investors, and in some cases, those involving shell companies and offshore accounts, a problem that has arisen during the adoption of the bill to legalize cannabis. Regardless of the challenges, any attachment to the mob that the RCMP can uncover will be enough to kill a license.
"Any commitment to organized crime automatically leads to a rejection of the claim," Morrissette of Health Canada wrote.
Weed shares traded at noon on Friday. Horizons Marijuana Life Sciences Index ETF
HMMJ, + 2.08%
rose 2% and the ETFMG Alternative Harvest ETF
MJ, + 1.54%
gained 0.9%. The S & P 500 Index rose 0.3%
on Friday noon.