Ontario's Ministry of the Attorney General said it had withdrawn charges against Mohamed Farah and three other individuals arrested during a gang, drugs and weapons investigation known as Project Traveller.
Court documents have shown that police wiretaps collected over the course of the investigation allegedly captured conversations about the video.
Ford's own voice is not on the Project Traveller wire taps but Toronto police have spent thousands of hours conducting surveillance on the mayor, though they have not laid any criminal charges against him.
Farah told a number of Toronto media outlets late last year that he had tried to arrange for the crack video to be sold to the Toronto Star newspaper and U.S. website Gawker, although those deals never went through.
Charges were also withdrawn Monday against Nicholas Obeng, Muhideen Jama and Halima Said.
"The Crown has a duty to assess a prosecution at every stage of the proceedings, and is duty bound to withdraw charges if there is no reasonable prospect of conviction, or if it is not in the public interest to proceed," said Heather Visser, a spokeswoman with the Ministry of the Attorney General.
"I can confirm that prior to the withdrawal of the charges, a number of the accused completed community service hours and made charitable donations."
Media reports of a cellphone video on which Ford appears to smoke crack cocaine first appeared in May of last year and sparked a police probe dubbed Project Brazen 2.
But at that time, Project Traveller was already well underway and had allegedly captured conversations about the video.
Ford has repeatedly said the police probe into his activities was politically motivated. He has publicly accused Toronto police Chief Bill Blair of wasting tax money with the investigation, and challenged the chief to arrest and charge him.
The mayor has also admitted to using drugs, including cocaine, in a "drunken stupor," and spent two months in rehab, returning to office just this month.
Ford is running for a second term as mayor in Toronto's municipal election this October.