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Canada exchange asks pot firms to disclose risks on U.S. operations

EconomyJan 05, 2018 15:40
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© Reuters. Canada exchange asks pot firms to disclose risks on U.S. operations

By Alastair Sharp

TORONTO, Jan 5 (Reuters) - A small Canadian stock exchange said on Friday it has asked marijuana companies to provide details on risks they face from any U.S. operations in the wake of a Trump administration move to boost enforcement of anti-cannabis laws.

The U.S. Justice Department on Thursday rescinded an Obama-era policy that had eased enforcement of federal marijuana laws in states that have legalized the drug, instead giving federal prosecutors wide latitude on pursuing criminal charges. light of yesterday's announcement there are certainly some disclosure issues that companies should address," Canadian Securities Exchange Chief Executive Richard Carleton told Reuters via telephone.

The exchange has contacted 17 cannabis companies with U.S. exposure whose shares it lists, asking for public statements on how the policy announced by U.S. Attorney General Jeff Sessions could impact their businesses, Carleton said.

Those companies include CannaRoyalty Corp CRZ.CD and Liberty Health Sciences Inc LHS.CD , he said.

The move follows an October notice from Canadian securities regulators that U.S.-linked marijuana companies must clearly warn investors about the risks, given the federal ban on marijuana production and sales. of marijuana companies have gone public over the past few years in Canada, helping them finance expansion in the existing medical cannabis market and prepare to enter the nation's recreational market, which is slated to open up in mid 2018.

Marijuana stocks have posted strong gains over the past year, making the group one of the hottest sectors in the Canadian stock market. was one of the first CSE-listed firms to comment on the impact of the new U.S. policy.

"We do not foresee the memorandum meaningfully impacting the way that existing cannabis business is conducted within legal states," CannaRoyalty CEO Marc Lustig said in a statement.

Carleton said he expects all firms to respond within days.

The others are: Alternate Health Corp AHG.CD , MPX Bioceutical Corp MPX.CD , Nutritional High International Inc EAT.CD , Golden Leaf Holdings Ltd GLH.CD , iAnthus Capital Holdings Inc IAN.CD , Marapharm Ventures Inc MDM.CD , Friday Night Inc TGIF.CD , Vodis Pharmaceuticals Inc VP.CD , International Cannabrands Inc JUJUa.CD , CannTrust Holdings Inc TRST.CD , NanoSphere Health Sciences Inc NSHS.CD , Body and Mind Inc BAMM.CD , High Hampton Holdings Corp HC.CD , Wildflower Marijuana Inc SUN.CD , and Tinley Beverage Company Inc TNY.CD .

Some 60 marijuana companies have listed on the CSE, choosing it over TMX Group Ltd's X.TO larger Toronto Stock Exchange. TMX said in October that it might delist pot stocks with U.S. ties. told Reuters via email on Thursday that its guidance on the matter from October stands.

Canada exchange asks pot firms to disclose risks on U.S. operations

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