The Globe and Mail reports in its Thursday, Oct. 11, edition that in the first comprehensive regulatory review of the cannabis industry's accounting and disclosures, Canada's securities enforcers say they see widespread disclosure problems that are getting in the way of investors' understanding of how to best invest in marijuana stocks.
The Globe's David Milstead writes that regulators reviewed the filings of 70 publicly listed weed companies, identified multiple issues and offered guidance in a Canadian Securities Administrators staff notice on Wednesday.
While the directives do not have the force of new regulations, companies that ignore the new guidance risk extended conversations with regulators and the prospect of refiling their financial statements. The pot companies were responsive to regulators' concerns, the CSA said.
"Where deficient disclosure was identified during our review, issuers either committed to prospective improvements or, when the deficiencies were pervasive, refiled certain documents."
Many had inadequate information in either their financial statements, or in the text of the management analysis that is supposed to help explain the company's financial performance.
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