Here’s the introduction to their piece in which they report that oversight and compliance is about to get stricter in Canada and we’d expect the same in the US too.
Here’ s the introduction ti the piece
Securities regulators across Canada are about to make life more difficult for cannabis companies with opaque corporate governance.
In a staff notice released to the public Tuesday, regulatory authorities from Ontario, British Columbia, Quebec, New Brunswick, Saskatchewan, Manitoba and Nova Scotia provided guidance in the areas of disclosing financial interests in significant corporate transactions, and in the independence of board members.
While the tightening of financial oversight might seem meddlesome for some businessfolk, the move should be welcome for investors wanting more insight into any possible conflicts of interests between corporate honchos and the companies they have stake in.
Chief of corporate finance for the British Colombia Securities Commission Mike Moretto said regulators have been thinking about the cannabis industry since its inception into the marketplace as publicly listed companies back in 2015.
“Specifically, we’ve provided additional guidance to issuers and investors along the way and I think this is just one piece of that,” he said. “It really highlights an area where we’re concerned about situations where one cannabis issuer is acquiring another and there’s cross ownership of financial interests and really we’re looking at the disclosure side.”
Mo cross ownership of financial interests, mo problems
Increasing numbers of allegations regarding shady dealings in the cannabis sector have come to light in recent weeks. For example, the Ontario Securities Commission issued an order at the end of September against Canada Cannabis Corporation (OTC: CCAN) implicating three of its top executives of defrauding its investors.
The allegations involve siphoning millions of dollars from the corporation into a lighting firm owned by one of Canada Cannabis Corp.’s vice presidents, without informing its investors.
The notice from Canada’s securities regulators outline two key sections. The first is disclosure of financial interests in merger and acquisitions transaction documents, which notes the cannabis industry’s higher-than-usual cross ownership of financial interests. The second is independence of board members, which speaks to cases where members have identified as independent without giving adequate consideration to potential conflicts of interest.
Notice from the
20 Queen St. W.
|FOR IMMEDIATE RELEASE|
September 30, 2019
CANADA CANNABIS CORPORATION, CANADIAN CANNABIS CORPORATION, BENJAMIN WARD, SILVIO SERRANO, and PETER STRANG, File No. 2019-34
TORONTO – The Commission issued an Order in the above named matter.
OFFICE OF THE SECRETARY
SECRETARY TO THE COMMISSION