Securities Regulators Seek Enhanced Disclosure from Cannabis Companies

It has been just over one year since cannabis was legalized in Canada. The rapid expansion of the cannabis industry has resulted in a remarkably high number of cross-ownership of companies.

The Canadian Securities Administrators ("CSA") have published Staff Notice 51-359 (the "Staff Notice") to provide further guidance to cannabis issuers on disclosure required in respect of certain significant corporate transactions. Specifically, the CSA observed inadequate transparency related to mergers, acquisitions and other significant corporate transactions, and deficient disclosure in respect of corporate governance practices.

Disclosure of Financial Interests in Significant Corporate Transactions