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Last week, the company announced that it had fired CEO Peter Aceto and forced the resignation of its chairman, Eric Paul, as a result of the scandal.

Under the Cannabis Act, Health Canada has a host of measures at its disposal to address non-compliance on the part of a licence holder. Those range from ordering the company to conduct an awareness campaign, to the suspension or revocation of a licence, to the issuance of monetary penalties of up to $1 million for each violation.

In a case such as CannTrust’s, the regulator could potentially levy fines for obstructing an inspector and for providing false or misleading statements, according to Toronto-based cannabis lawyer Harrison Jordan. It also has the power to strip the security clearance of directors and officers.

One licensed producer has already seen its license suspended and another, Agrima Botanicals, has had its license revoked entirely following reviews by the agency.

While Fraser says she believes CannTrust’s penalties are unlikely to exceed a large fine, the allegations involved at least raise the spectre of more serious charges under Division 1, the criminal portion of the Cannabis Act.