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Tuesday, February 13, 2018

On February 8, 2018, the Canadian Securities Administrators (the “CSA”) released CSA Staff Notice 51-352 (Revised) - Issuers with U.S. Marijuana-Related Activities (the “Notice”), which provides further guidance on CSA staff’s disclosure expectations for issuers with U.S. cannabis-related activities. The revised Notice replaces the initial CSA Staff Notice 51-352 - Issuers with U.S. Marijuana-Related Activities that was published on October 16, 2017.

The Notice reiterates the CSA’s position that a disclosure-based approach for issuers with U.S. cannabis-related activities in U.S. states where such activity has been authorized, remains appropriate in the current political and regulatory climate. In addition, the Notice outlines additional disclosure requirements for all such issuers, including those with direct and indirect involvement in the cultivation and distribution of cannabis and that provide goods and services to third parties within the U.S. cannabis industry. The CSA expect issuers to provide the requisite disclosures in all prospectus filings, marketing materials, news releases and other disclosure documents, including Annual Information Forms and Management’s Discussion and Analysis.

The revised Notice follows months of political and regulatory uncertainty surrounding the treatment of U.S. cannabis-related activities, which was magnified by the rescission of the Cole Memorandum on January 4, 2018 by United States Attorney General Jeff Sessions. Several U.S. states have adopted legislation that permits the use and/or sale of cannabis for medical and/or recreational purposes notwithstanding that cannabis remains a controlled substance under U.S. federal law. The Cole Memorandum was a directive issued on August 29, 2013 by the then Deputy Attorney General James M. Cole that had eased enforcement of federal laws in states that have legalized cannabis in some form.

The Notice cautions that in the event that U.S. federal law respecting cannabis is enforced, there could be material consequences including prosecution and asset seizure of affected issuers. Such issuers are also expected to evaluate, monitor and re-assess all requisite disclosures on an on-going basis. Issuers with U.S. cannabis-related activities who do not provide appropriate disclosure may be subject to regulatory action. The CSA will also continue to monitor industry developments in this regard.

The Notice reinforced that each stock exchange may make its own judgment in enforcing and applying its own listing requirements, including rules relating to compliance with applicable laws.

Overall, the Notice reinforces the CSA’s disclosure-based approach to issuers with U.S. cannabis-related activities.

If you have any questions with respect to the matters discussed above, please contact Amir Torabi by email at or Michael Rennie by email at

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.