Cannabis is be­com­ing an earner for once re­luc­tant Toronto law firms

Calgary Herald - - FINANCIAL POST - KRIS­TINE OWRAM

The le­gal­iza­tion of cannabis in Canada may have di­min­ished the need for crim­i­nal lawyers, but it’s cre­ated a boom­ing busi­ness for the coun­try ’s most pres­ti­gious cor­po­rate law firms.

The cannabis sec­tor has seen 27 ma­jor deals worth US$10.6 bil­lion an­nounced this year, ac­cord­ing to data com­piled by Bloomberg.

Add in 127 stock sales worth US$2.65 bil­lion, and ad­vice to clients on how to nav­i­gate a com­plex new reg­u­la­tory en­vi­ron­ment, and it’s been a boon for Toronto’s big­gest law firms, many of whom had re­garded it with trep­i­da­tion for years.

“I’ve never seen an in­dus­try start to dom­i­nate our prac­tice in the way that this one has,” said Pa­tri­cia Olasker, part­ner at Davies Ward Phillips & Vineberg LLP. “It’s un­prece­dented in the life­time of most prac­tic­ing lawyers.”

Davies ranks first among its peers for work­ing on US$5.8 bil­lion worth of cannabis M&A this year, in­clud­ing ad­vis­ing Canopy Growth Corp. on Con­stel­la­tion Brands Inc.’s $5-bil­lion in­vest­ment in the Smiths Falls, Ont.based pot pro­ducer.

Like many of Canada’s cor­po­rate law firms, Davies en­tered the sec­tor be­cause its tra­di­tional clients needed to un­der­stand the im­pli­ca­tions of re­cre­ational le­gal­iza­tion on Oct. 17.

“It’s not so much that we sat down one day and thought, we need a cannabis strat­egy, but rather that our clients were get­ting into this space and so they dragged us there,” Olasker said in a phone in­ter­view.

“They’re lenders, they’re in­vest­ment banks, they’re re­tail­ers and share­holder ac­tivists, so our work is com­ing from con­ven­tional sources but ad­dress­ing this new in­dus­try.”

Davies started off early in the pot space and is now ad­vis­ing “a few of the more se­nior cannabis play­ers” on tax law, brand­ing, mar­ket­ing and com­pli­ance. It’s also ed­u­cat­ing the next gen­er­a­tion about cannabis law through a new course at York Univer­sity’s law school taught by Olasker and her col­league Mindy Gil­bert.

It was a sim­i­lar story at Osler, Hoskin & Har­court LLP, which ad­vised Con­stel­la­tion Brands on the Canopy deal and was the bankers’ coun­sel for Til­ray Inc.’s ini­tial pub­lic of­fer­ing, the first and so far only mar­i­juana IPO on a ma­jor U.S. stock ex­change.

Osler is tied for sec­ond place with Mc­Carthy Te­trault and Sul­li­van & Cromwell LLP, ad­vis­ing on US$3.6-bil­lion worth of deals this year, ac­cord­ing to Bloomberg data.

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