Mergers and acquisitions: CSA weighs in on cannabis industry

The cannabis industry continues to heat up in Canada and with that come recommendations from regulatory bodies across the country. Some of those recommendations surround the mergers and acquisitions regarding some of these companies in Canada as they forge ahead in a growing industry. These bodies are calling for increased transparency when it comes to mergers, acquisitions and other corporate dealings.

The Canadian Security Administrators (CSA) are calling for disclosures regarding issues like conflict of interest and getting investors the information they require to make prudent decisions about their investments. The CSA contends this type of transparency may help investors to decide whether they agree on possible mergers and acquisitions deals. It also has some issues with cross-ownership of some of these companies and what that means for owners' and directors' financial interests -- something about which investors should be aware.

The CSA believes acquirers and acquirees in mergers and acquisitions deals need to be open about their financial interests in all companies involved to avoid potential conflicts of interest. It recommended that the chair of a board should be an independent director and that another person act as a lead director. As it stands now, the CSA is weighing in with suggestions only, rather than incorporating these as industry guidelines. These recommendations have affected seven provinces, including Ontario.

Transparency is an important element when it comes to mergers and acquisitions deals. A lawyer in Canada experienced in business law may be able to help guide a client through the complex legalities of deals that might seem confusing to many. Whether a deal is worth hundreds of thousands or several millions, having a lawyer offer advice at every juncture is typically a wise business decision. 

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