A proposed medical marijuana operation in Lakeshore is going to federal court in Canada seeking to have the decision to deny its license for operations overturned. CEN Biotech (OTCMKTS:FITX) has asked the government to allow a federal judicial review of the denial by Health Canada to allow it to operate a medical marijuana facility. The application received notice of the regulator to deny it and the company says the decision was unlawful and unreasonable.
Out Of Bounds
CEN says that health Canada also breeched confidentiality by passing its correspondence to third parties not directly involved in the application process. These parties included the town of Lakeshore and CEN claims that hurt the company’s standing. CEN Biotech (OTCMKTS:FITX) has been under intense scrutiny the past few months. The facility would have positioned CEN as the owner of one of the largest production facilities in the country.
The facility was actually completed before the license was acquired and there have been claims that CEN told its shareholders the license was approved, which is illegal. At the time CEN Biotech (OTCMKTS:FITX) released the news it’s CEO, Bill Chaaban, was selling 71 million shares of the stock into the open market. These sales resulted in a personal gain of $4.6 million. Contrary to these events, the company claims that Health Canada was obligated to approve the application as all terms had been met by CEN. They are asking the courts to immediately approve the license.
Backers of CEN and the facility have already put $14 million into the facility and another one nearby that is intended to be used for R&D. Thee CEO also claims he personally invested $5 million into the facilities but that information is disputed also. Attempts to reach Chaaban and his associates have gone unanswered. CEN Biotech (OTCMKTS:FITX) states that only two deficiencies were found in its original application and that both have been corrected. They have20 days to respond to the denial but in the meantime it seems the legal process is moving forward.