CSE-listed pot firms to disclose risks in U.S.

Effects of change to Obama-era marijuana policy

TORONTO• The Canadian Securities 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The U.S. Justice Department on Thursday rescinded an Obama- era policy that had eased enforcement of federal marijuana laws in states that have legalized the drug, instead giving federal prosecutors wide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.

“In light of yesterday’s announcement there are certainly some disclosure issues that companies should address,” CSE 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. and Liberty Health Sciences Inc., 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 there on marijuana production and sales.

DISCLOSURE ISSUES THAT COMPANIES SHOULD ADDRESS.

Dozens of marijuana firms 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.

CannaRoyalty 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.

Some 60 marijuana companies have listed on the CSE, choosing it over TMX Group Ltd.’s larger Toronto Stock Exchange. TMX said in October that it might delist pot stocks with U.S. ties.

TMX told Reuters via email on Thursday that its guidance on the matter from October stands.