CSA Staff Notice – Review of Reporting Issuers in the Cannabis Industry

23 10 2018

The Canadian Securities Administration (“CSA”) published CSA Staff Notice 51-357 Staff Review of Reporting Issuers in the Cannabis Industry which summarizes a review of disclosure of 70 reporting issuers operating in the cannabis industry. The review was conducted by the securities regulatory authorities in Alberta, British Columbia, Ontario, and Québec and the results identified the following three key areas where cannabis issuers are expected to improve their disclosure practices:

  • Licensed cannabis producers often did not provide sufficient information in their financial statements and management’s discussion and analysis for an investor to understand their financial performance. International Financial Reporting Standards (IFRS) require issuers to record growing cannabis plants at their fair value. 100% of the Licensed producers we reviewed needed to improve their fair value and fair value related disclosures;
  • Some issuers did not consistently comply with securities requirements for forward-looking information, guidance for providing balanced disclosure and certain other requirements; and
  • 74% of issuers with cannabis operations in the U.S. did not provide sufficient disclosure about the risks related to their U.S. operations to satisfy the disclosure expectations set out in CSA Staff Notice 51-352 (Revised) Issuers with U.S. Marijuana-Related Activities (the S. Disclosure Expectations Notice).

You can read the complete notice HERE.

You can find further discussion in the following summaries which may also be of assistance in understanding disclosure by cannabis issuers:

CSA Publishes Review of Disclosure of Reporting Issuers in the Cannabis Industry  – McMillan LLP

CSA Provides Further Guidance on Reporting Issuers’ Disclosure Obligations in the Cannabis Industry – Minden Gross LLP

The Canadian Securities Administrators weigh in on disclosure by cannabis industry participants – Norton Rose Fulbright


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