Today's General Counsel, V15 N2, Summer 2018

SUMMER 2018 TODAY’S GENER AL COUNSEL

Canadian Disclosure Obligations for United States Cannabis Companies BY VIRGIL HLUS AND ALEX FARKAS

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n October 2017, the Canadian Securities Administrators (CSA) published CSA Staff Notice 51-352 for companies with United States cannabis-related activities. It provided some long-sought commentary on the disclosure requirements and regulation of entities with ties to the growing United States cannabis industry. Although many states have decriminalized the drug to varying degrees, cannabis remains a Schedule 1 drug under the United States Controlled Substances Act. Its possession, cultivation, usage and sale contravene federal laws. This discrepancy between federal and state law has caused confusion for many United States cannabis companies and investors on how to comply with Canadian disclosure requirements. Under the CSA Notice, United States cannabis companies must provide an appropriate level of disclosure to allow each investor to make an informed decision based on all “material facts and risks” in respect to cannabis-related activities. In particular, the Notice outlined the disclosure requirements for companies on the basis of the type of activities being undertaken, and provided that: 1. United States cannabis companies with direct involvement in cultivation or distribution outline the regulations for states in which the company operates, and confirm how the company complies with the applicable licensing requirements and regulatory framework; 2. Cannabis companies with indirect involvement in cultivation or distribution outline the regulations for the states in which the company’s investee(s) operate and provide reasonable assurance that the business is in compliance with applicable licensing requirements and accompanying regulatory framework; and 3. Cannabis companies with material ancillary involvement provide reasonable assurance that the applicable customer’s or investee’s business is in compliance with applicable licensing requirements and accompanying regulatory framework.

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Today's General Counsel, V15 N2, Summer 2018

Published on Jun 18, 2018

Today's General Counsel

The list of things that separate us has become so long that it sometimes seems as if the Divided States of America might be a better name for our nation, but lately a few strands of unity have begun to show up. Any doubt that the #MeToo movement cut across political and cultural divides was erased recently, when a prominent Southern Baptist leader was removed from his post because of a massive backlash from evangelical women upset over comments he made in the past that are now perceived as sexist and demeaning. The workplace is perhaps the largest arena where #MeToo is prompting big changes, and in this issue of Today’s General Counsel a number of workplace issues get a critical look.