The three men behind Canadian Cannabis Corporation have been accused of defrauding investors out of millions of dollars by the Ontario Securities Commission.
The OSC alleges that the firm’s co-founders raised about $3.2 million and US$8.8 million from approximately 125 investors – 60 of which were located in the Ontario area – by selling shares and debentures of CCC.
They told investors their funds would be used to develop and operate CCC but by the fall of 2016, all three had resigned from the company, having depleted all investor money without ever engaging in the cultivation or distribution of cannabis.
The OSC further alleges that $3 million was “syphoned off” from CCC and loaned to a company owned by Serrano. This, along with the other funds, was misused, with large amounts being diverted to their own companies or family members, according to the regulators.
The OSC will hold a hearing on September 30 into these allegations. It’s the province’s regulators’ first case of fraud allegations in the cannabis sector.