CANNAINVESTOR Magazine U.S. Publicly-Traded Companies November 2017 | Page 236

236

Canadian publicly listed issuers have recently been given guidance by the Canadian Securities Administrators (“CSA”) and the Toronto Stock Exchange (“TSX”) with respect to issuers that currently have or are in the process of developing cannabis-related activities in the United States (“U.S.-Related Cannabis Issuers”). Regulator guidance in Canada for U.S.-Related Cannabis Issuers was much anticipated due to the discrepancy between the treatment of cannabis between Canadian and U.S. law, including the fact that while some U.S. States have authorized the use and sale of cannabis, it remains illegal under U.S. federal law. U.S. federal law relating to cannabis could be enforced at any time, which puts U.S.-Related Cannabis Issuers at risk of being prosecuted.

CSA Disclosure-Based Approach

The CSA set out its disclosure expectations for U.S.-Related Cannabis Issuers in Staff Notice 51-352 Issuers with U.S. Marijuana-Related Activities (“CSA Staff Notice”) on October 16, 2017, which is premised on the assumption that U.S.-Related Cannabis Issuers are complying with current U.S. State laws and regulations.

By: Andrew Elbaz, Alexandra (Sasha) Toten,

and Joseph Jamil of Minden Gross, LLP.

CSA Announces Disclosure Expectations for Cannabis

Companies Operating in the U.S.