The NDP and Liberals are calling on Health Canada to halt the licence bid of the company seeking to become the country's largest medical marijuana producer, saying the government has failed to perform sufficient due diligence amid serious allegations of misrepresentation and falsified documents.
Opposition health critic and deputy NDP leader Libby Davies said concerns about the accuracy of statements made by CEN Biotech and its parent company Michigan-based Creative Edge Nutrition, which helped inflate the company's value, are deeply worrisome. The company has applied to operate a massive growing operation in Lakeshore, Ont., but has issued several press releases and made public statements that are highly questionable.
"How does a huge application like this, that's got a whole number of suspicions and questions around it, get to the final stage of approval?" Ms. Davies said. "The federal government absolutely has the responsibility and the capacity to put on the brakes to say we're going to take another look at this, or to bring it to some other level of investigation."
CEN Biotech CEO Bill Chaaban, in his first interview in months addressing the concerns, said he has done nothing wrong, and is offended by the suggestion his licence application be halted.
"I'm deeply offended by those statements, and I'm deeply offended by the accusations," Mr. Chaaban said. "Because it's an attack on my character, and it's an attack on the character of the company."
"Everything has been done according to law, by the book. No law has been broken. I'm just wondering when it became unpopular for capitalism, when capitalism was a crime, for someone to be a successful businessman and make money. That's what I'd like to know. Have we become communist in Canada ... to criticize how much someone's made?"
CEN Biotech has been under a cloud of allegations surrounding its conduct in the capital markets. Trading on the loosely regulated U.S. OTC market, Mr. Chaaban claimed this summer that there was a partnership with Health Canada, and that his company had effectively been granted its licence, when it had not. Those statements, and several others, helped drive up the company's stock price. At the same time, Mr. Chaaban was selling millions of shares and pocketing millions of dollars in proceeds.
As well, the company now finds itself amid further allegations of falsifying documents, with at least four different signatures attributed to Mr. Chaaban showing up on various company documents, including those filed with the U.S. Securities and Exchange Commission. Although several of Mr. Chaaban's problematic claims have related directly to Health Canada, the government said this week that public should contact police or the SEC with any such concerns.
Mr. Chaaban shrugged off the discrepancies. "I can sign my signature any way I want. I think it's ridiculous. What if I want to sign with my left hand? If I want to sign with my toes, I'm going to sign with my toes," Mr. Chaaban said. "I could really care less. I could sign with my mouth. It depends on the mood I'm in."
Deputy Liberal leader Ralph Goodale said that suggestion is unacceptable, and that the government should be investigating the problems itself.
"If at any point in the application process something untoward comes up – when you're dealing with allegations of misrepresentation, stock manipulation, falsified documents etc. – the applicants surely are on notice that if there's a hint of that before, during or after the application process, your application is in jeopardy," Mr. Goodale said. "And if the companies were not told that, then there's serious dereliction of responsibility on the part of the government."
If the Liberals were to form government after the next election, Mr. Goodale said the licence application would be halted and reviewed. "Assuming this thing is still outstanding, it's got to be subject to a complete re-examination," Mr. Goodale said. "This application doesn't pass the smell test."
A spokesman for Health Minister Rona Ambrose repeated on Wednesday the government's call for the public to step forward with concerns about CEN's conduct. "Like all Canadians, applicants under this program must ensure they comply with the law," said the minister's spokesman, Michael Bolkenius. The department has said it does not deal with securities regulation, nor has it probed concerns about how CEN has conducted itself in the capital markets.
The application by CEN Biotech to grow 600,000 kilograms of medical marijuana a year is the largest currently before Health Canada. Mr. Bolkenius has said the minister does not get involved in licence applications. But more than 100 licence-refusal letters obtained by The Globe through Access to Information show the minister is often listed as the primary person refusing the licence., for reasons as small as incomplete paperwork. The minister has also refused the licence application of companies making false statements or misrepresenting themselves.