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by Mike Caswell

The Ontario Securities Commission has banned and fined former WeedMD Inc. chairman Michael Kraft and an associate, Michael Stein, for insider trading. The OSC claimed that Mr. Kraft tipped Mr. Stein about a deal in which WeedMD planned to expand its cannabis operations in 2017. The agreement saw WeedMD enter into a "transformational expansion" in which it leased five acres of greenhouse space.

The penalties for Mr. Kraft, 60, and Mr. Stein, 64, are contained in an order that the OSC released on July 2, 2024. The regulator has banned Mr. Kraft from trading for three years and from serving as an officer or director for four years. He must also pay a $200,000 fine and $150,000 in hearing costs. Mr. Stein is banned from trading for four years and from serving as an officer and director for three years. He must pay a $150,000 fine, $50,000 in costs and $29,345 representing his gains.

The events at issue go back to November, 2017, when WeedMD was looking to expand its greenhouse space. The company had a proposed deal to lease five acres at a site in Strathroy, a small Ontario community west of London. The lease was significant to WeedMD, as it would expand the company's annual cannabis production to 21,000 kilograms, up from 1,200 kilograms.

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