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CannTrust Weed Cultivation Scandal Prosecution Falls Apart

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Charges of fraud and other offenses against three former cannabis company executives were withdrawn by prosecutors in a Canadian court on Wednesday.

Prosecutors with the Ontario Securities Commission (OSC) told a Canadian court on Wednesday that they had no reasonable expectation of gaining a conviction against three former executives of the cannabis firm CannTrust Holdings and asked to withdraw charges against the men. But defense lawyers for former CannTrust CEO Peter Aceto, former chairman Eric Paul and former vice-chairman Mark Litwin have asked the judge for a full acquittal in the case.

“After careful review of the evidence during the trial, we are of the view that as charged, there is no reasonable prospect of conviction,” OSC lawyer Dihim Emami told Victor Giourgas, the judge presiding over the case.

The case involved allegations that Aceto, Paul and Litwin had overseen the illegal cultivation of thousands of kilograms of cannabis for Canada’s regulated market. In July 2019, CannTrust revealed that Health Canada, the country’s national health department and chief federal regulator of the cannabis industry, had determined that the company’s cultivation facility in Pelham, Ontario was found to be non-compliant with some regulations. The company had accepted the finding, noting that five rooms being used to grow cannabis at the Ontario facility were not properly licensed for cultivation between October 2018 and March 2019. The rooms were not fully licensed to cultivate cannabis until April 2019.

“Our team has focused on building a culture of transparency, trust and excellence in every aspect of our business, including our interactions with the regulator,” Aceto said at the time in a statement from CannTrust. “We have made many changes to make this right with Health Canada. We made errors in judgment, but the lessons we have learned here will serve us well moving forward.”

The OSC alleged that the defendants claimed in corporate disclosures that CannTrust’s cannabis operations were fully compliant with regulations. Aceto, Litwin and Paul were charged by the OSC and the Royal Canadian Mounted Police with quasi-criminal offenses including fraud related to failing to disclose the unlicensed cultivation to investors. Litwin and Paul were also charged with insider trading for selling stock in CannTrust after learning about the allegations of unlicensed growing but before they were made public. Additionally, Litwin and Aceto were charged with making a false investment prospectus and a false preliminary prospectus.

Testimony Reveals Weakness Of Prosecutor’s Case

Last week, during the trial of the three former executives, Graham Lee, a former director of quality and compliance at CannTrust, testified that Health Canada staff had inspected the Ontario cultivation in November 2018 and April 2019, but did not take any action related to the unlicensed grow rooms. But at a subsequent visit, Health Canada inspectors inquired about the unlicensed rooms.

“They asked me if plants had been put into the unlicensed rooms, and they had been told other things earlier in the day…and so I clarified for them that, yes, they had been,” Lee testified.

As part of his testimony, Lee also said that CannTrust staff had once staged photographs taken as part of a regulatory submission to Health Canada in an attempt to obscure the purpose of the extra grow rooms. But he also noted that the employees had not been instructed by senior management to do so.

During cross-examination, defense attorneys presented evidence that the Ontario facility had been licensed to grow cannabis that did not contain any references to specific rooms. The revelation made it difficult for prosecutors to prove that unlicensed cultivation had occurred at the facility. 

Scott Fenton, an attorney representing Litwin, presented Lee with an April 5 email he sent to others at CannTrust, in which he wrote, “Please find attached, we are now licensed for all of the remaining outstanding Niagara areas.”

“But you told everybody that you’re now licensed,” Fenton said to Lee.

“Yes,” Lee answered.

“And used the wrong terminology?” Fenton asked.

“Yes,” Lee admitted.

“Were you confused regarding the operation of the Cannabis Act and its regulations?” asked Fenton.

“At times,” Lee replied.

On Wednesday, prosecutors told the court that the revelations made during the trial made it impossible to secure a conviction in the case and asked the judge to drop the charges against the defendants. But their lawyers asked Giourgas to fully acquit the former CannTrust executives of the charges against them.

“I am respectfully against dragging this out,” Fenton said. “The prosecution has determined they can’t prove the case. It is time to end it, and it should end today.”

“I can’t tell you how much anxiety there is among the defendants about the end of this matter for the reasons that you can imagine,” added Frank Addario, Aceto’s lawyer.

Prosecutor Emami asked for more time, saying he had received the request for acquittal that day. The defendants were due back in court on Thursday for the judge’s decision on the motion to acquit.

Source: https://hightimes.com/news/canntrust-weed-cultivation-scandal-prosecution-falls-apart/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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