The Canadian Securities Administrators have published CSA Staff Notice 51-352 Issuers with U.S. Marijuana-Related Activities, which outlines the regulators’ specific disclosure expectations for issuers that have, or are in the process of developing, marijuana-related activities in the U.S.
In a statement released Oct. 16, the CSA warned that issuers with marijuana-related activities in the U.S. assume certain risks due to conflicting state and federal laws. Some states have authorized the use and sale of marijuana, however it remains illegal under federal law. The federal law “could be enforced at any time, and this would put issuers with U.S. marijuana-related activities at risk of being prosecuted and having their assets seized,” said the CSA.
Legal and regulatory environment disclosure
"We expect issuers with marijuana-related activities in the U.S. to address the current legal and regulatory environment in their disclosures, including any risks that result from changes in the approach to enforcement of U.S. federal law," said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
The CSA says its disclosure expectations apply to all issuers with U.S. marijuana-related activities, including those with direct and indirect involvement in the cultivation and distribution of marijuana, as well as issuers that provide goods and services to third parties involved in the U.S. marijuana industry.