Cannabis Company Executive Denied Security Clearance Due To Adverse Police Reports

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The manager of a cannabis company in Nova Scotia has been denied government security clearance over allegations of unauthorized cannabis activity and adverse police reports.

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Everett Rodger Stuckless complained that Health Canada’s decision would reverse its investment of more than $ 2 million and five years of work in building Nova Grow Ltd., but on Tuesday the Federal Court upheld the denial.

“This results in extraordinary costs for Mr. Stuckless,” said Derek Brett, who represented Stuckless in a challenge to the decision in Federal Court.

“Health Canada appeared to be conducting a woefully negligent investigation.”

Under federal cannabis regulations, the government requires security clearance for directors and officers of a company licensed to grow, process or sell cannabis.

The regulations were designed to keep black market products and disreputable characters out of the legal cannabis industry.

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Stuckless applied to Health Canada for permission to grow, store and sell medical marijuana in 2016.

The process includes taking fingerprints and submitting to a background check by the RCMP. For years he kept asking how his candidacy was going as he pursued his business plans.

In April 2020, Health Canada’s safety committee finally assessed the RCMP’s baseline report – and didn’t like what it read.

Charges of possession of marijuana for the purpose of trafficking were withdrawn in 2018; there has been a complaint from a former business partner that he bragged about being friends with the local Hells Angels as a threat, although police “could not confirm or deny” a connection to the local Hells Angels. bikers.

There have been complaints of illegal cannabis-related activity at its business premises in Nova Scotia and New Brunswick, and a “high number of break-and-enter incidents that have taken place,” according to the files. court. Halifax Police said when Stuckless called to report a burglary he said if police did nothing he would.

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Based on this initial information, it was recommended to deny security clearance to Stuckless. He had the opportunity to respond, and he disputed much of the information.

He said, among other things, that he owned the building but not the cannabis distribution company that had been searched there; that he had “little or no knowledge” of the Hells Angels. He denied making threats and said he was wrongly charged, which is why the charge was withdrawn. His businesses, he said, were selling vaping and smoke products, not illegal cannabis.

He said he had no criminal convictions or association with criminal organizations and should receive a security clearance.

“Sir. Stuckless offered legitimate explanations and at the same time the administrative decision maker decided to ignore those explanations,†Brett said in an interview.

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At the end of last year, Health Canada denied his security clearance.

Stuckless has been told that it “poses an unacceptable risk to public health and safety, including the risk of cannabis being diverted into illicit market activity.”

He appealed the decision to the Federal Court.

Brett argued in court that the government’s decision was unfair because Health Canada accepted the police information without corroboration or investigation, and unreasonable because there was no evidence that Stuckless posed a safety risk.

However, previous court rulings against other potential leaders in the cannabis industry have ruled that Health Canada does not need to conduct independent research on law enforcement reports.

On Tuesday, Judge Roger Lafrenière agreed that was also appropriate in this case.

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Lafrenière said Health Canada’s decision was both fair and reasonable.

The agency “was perfectly entitled to consider all the circumstances and to prefer the evidence gathered from the police to the denials and explanations of the applicant”, indicates its decision.

Brett said Stuckless could appeal.

“We’ve had quite a battle and we don’t know if it’s over,†said Brett.

“It’s understandable that the government wants high standards†for who can work in the cannabis industry, he said. But “isn’t it fair that applicants also have high standards for the type of work Health Canada does in its investigation to ensure it is thorough?”

As of July 31, 2020, only about half of the 6,398 security clearance requests made by executives of cannabis companies had been granted, according to data published at the time in the National Post.

Health Canada said Wednesday it could not provide updated data on security applications before the publication deadline.

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