Brokerage firm Canaccord Genuity Corp. has won a multi-million dollar judgment against a former cannabis company CEO who personally guaranteed loans provided through a corporate margin account.
The Supreme Court of British Columbia granted summary judgment to Canaccord, which sought to enforce a personal guarantee against Nicholas Vita, who served as CEO of two cannabis companies, Columbia Care LLC and Columbia Care Inc., between 2012 and 2024.
According to the court, in 2019, after Canaccord took Columbia Care public, Vita and the company’s chairman, Michael Abbott, discussed using their shares in the company as collateral for a large loan.
However, the decision noted that the firm couldn’t open an account for Vita personally, since he is a U.S. citizen and the firm isn’t registered in the U.S.; and, Canaccord’s U.S. affiliates couldn’t open an account for him to use cannabis company shares as a collateral, since that isn’t allowed in the U.S.
Instead, the firm opened the account in the name of an offshore company, Amaranthus, controlled by Abbott’s family trust. And, in late 2019, Canaccord agreed to provide loans, backed by shares in the company, and a personal guarantee from Vita.
In 2024, Canaccord decided to cancel the account’s margin facility and it demanded repayment of Amaranthus’ outstanding debt of US$6.9 million. And, in early 2025, the firm filed a legal action seeking to enforce the guarantee.
According to the court’s decision, among other things, Vita argued that the guarantee was unenforceable because it stemmed from an illegal transaction — the creation of a “sham arrangement whereby the account was created for Canaccord to loan money to Mr. Vita using his Columbia Care shares as collateral.”
However, the court rejected that argument, saying, “In my view, the illegality defence fails because the record clearly demonstrates that Amaranthus, not Mr. Vita, was the true legal holder of the account and recipient of the loans from Canaccord.”
It noted that the account opening forms, account statements and the documentation of Vita’s guarantee all show Amaranthus as the account holder.
“In these circumstances, I can see no basis to claim that Amaranthus was not the true account holder, pledger of the [shares], and recipient of Canaccord’s loans,” it said — nor was there any evidence that the brokerage firm was involved in any arrangement between Amaranthus and Vita regarding the proceeds of the loans.
“Thus, I can see no way in which this constituted an illegal arrangement or was entered into with the object of committing an illegal act,” the court said.
As a result, the court granted summary judgment to Canaccord against Vita for amounts that it loaned to Amaranthus under Vita’s guarantee (now, approximately US$7.4 million).