James Munro tells The Lawyer's Daily that CSA provides common sense disclosure guidance to issuers involved in U.S. cannabis-related activities 

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October 31, 2017


Canada’s security regulators are raising red flags about Canadian marijuana companies doing business in U.S. states which have legalized use of the drug, and legal experts note such companies could risk being delisted from the nation’s stock exchanges if they started or continued to operate south of the border. The Canadian Securities Administrators (CSA) released a staff notice Oct. 16 which outlines a series of disclosure expectations for issuers with U.S. marijuana-related activities.


McMillan’s James Munro, a Vancouver-based lawyer who serves as co-chair of the cannabis group, called the requirements “common sense guidance that offers clarity for operators who are working in [the marijuana] industry.”


“They give a very good framework on exactly the type of disclosure the CSA expects issuers in this industry to include in its continuous disclosure,” he said. “A key takeaway for me is I think this is going to be very similar to the mining industry, where the security regulators do periodic compliance checks with the issuer’s disclosure.”


Munro also said the likely outcome of this stand by the exchanges is that companies with U.S. marijuana operations who were seeking to be listed would not be, and listed companies who were seeking to start U.S. marijuana operations or already have them would be subject to a continuous listing review by the exchange and possibly risk being delisted.


“It’s important to note the exchanges said they would continue to monitor legal developments in the United States — and these legal developments could change at any time, either positively or negatively,” he said. “If the U.S. federal government legalized cannabis, these roadblocks would likely be cleared.”


To read the full article head to the Lawyer’s Daily.