Show all postsFiltered by: Jonathan Sherman

Canadian Securities Regulators Provide Guidance on Issuers Engaging in Cannabis Related Business Activities in the US

On October 16, 2017, the Toronto Stock Exchange and the TSX Venture Exchange (collectively, the Exchanges) issued notices providing guidance to those companies with business activities related to the cultivation, distribution or possession of marijuana in the United States (the Subject Entities). In particular, the Exchanges’ notices provide that the Subject Entities could be subject to an in-depth review based on their continuous disclosure records, which could result in de-listing on the applicable Exchange. In contrast, the Canadian Securities Administrators (the CSA) took a more lenient approach in its Staff Notice issued on October 16, 2017, addressed to issuers engaging in cannabis related activities in the US.

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Standing Committee on Health Approves Amendments to Bill C-45 Regarding Cannabis Edibles and Concentrates

On Tuesday, October 3, 2017 the Standing Committee on Health (the HESA) approved a number of amendments to Bill C-45, the Cannabis Act (the Act).Two specific amendments will likely have a considerable impact on the recreational cannabis market:  

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Federal Government Introduces its Cannabis Tax Proposal; Alberta Unveils Proposed Provincial Framework

On Tuesday, October 3, 2017 the Government of Canada unveiled its proposal for a federal excise tax on the sale of cannabis. Under the proposal, a $1 tax would be levied on prices up to and including $10 per gram and a 10% tax would be levied on prices over $10 per gram. The proposal is for the tax revenues to be evenly split between the Federal and Provincial Governments.

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Strategies for Issuers with Cannabis-Related Activities in the U.S.

On August 17, 2017, the TMX Group issued a statement announcing that it has engaged with the Canadian Securities Administrators regarding the clearing of securities of issuers with cannabis-related activities (including assets and operations) in the U.S. Although the TMX Group’s general position on companies engaging in such activities has been a source of speculation and uncertainty for some time, the announcement highlighted specific uncertainty about whether the TMX Group, which is the parent company of The Canadian Depository for Securities Limited ("CDS"), might make the securities of issuers with cannabis-related activities in the U.S. ineligible for clearing and settlement through CDSX. Although no such action has been taken or articulated, such action could materially impede the ability to trade in the securities of issuers with cannabis-related activities in the U.S. and thus have a chilling effect on the listing and financing of such issuers.

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LCBO to Control Retail and Online Cannabis Sales in Ontario

Yasir Naqvi, Attorney General, Charles Sousa, Minister of Finance and Dr. Eric Hoskins, Minister of Health and Long-Term Care, announced Ontario’s planned approach to the federal legalization of cannabis as proposed by Bill C-45, the Cannabis Act, this morning. Bill C-45 left significant discretion to the provinces for determining the appropriate distribution, sale and retailing of cannabis.

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Ontario Conducts Public Consultation on Cannabis Legalization

On April 13, 2017, the Government of Canada released Bill C-45, the Cannabis Act, which, as discussed in a prior blog post, deferred significant discretion to the provinces with respect to the distribution, sale and retailing of cannabis.

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Alternative Financing Options in the Cannabis Industry

The recent developments in Canadian cannabis policy and legislation have sparked significant investment in licensed cannabis producers. Until recently, equity financing has been the primary form of financing, with Canadian cannabis companies raising approximately $1 billion over the past twelve months.

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Health Canada Improvements to the Licensing of Cannabis Production under the ACMPR

On May 26, 2017, Health Canada announced significant developments to the licensing process under the Access to Cannabis for Medical Purposes Regulations (ACMPR). As the medical cannabis industry continues to evolve, the Government of Canada has updated its licensing regime in order to streamline the process and enable increased production.

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Draft Cannabis Act Released by Canadian Federal Government

Today the federal government released Bill C-45, the draft Cannabis Act. If enacted, this will make Canada the first G7 country to legalize recreational cannabis. Cannabis will remain illegal as the bill moves through the legislative process. If it is approved by Parliament, the bill could become law with a target date of no later than July 2018, according to the Government of Canada.

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Exporting Cannabis from Canada

A Licensed Producer (LP) can obtain a permit from the federal Minister of Health to export cannabis internationally from Canada to a single and specified importer. While export permits can currently only be used to export cannabis for medical purposes, some LPs are committing considerable resources on their international exportation efforts because of the current and potential future international opportunities within the global cannabis market. Additional regulatory information regarding cannabis exportation can be found in Subdivision G of the Access to Cannabis for Medical Purposes Regulations (ACMPR). 

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