TORONTO, Oct 10 (Reuters) - Canadian regulators said on Wednesday that they had found that the level and quality of disclosure by cannabis companies was insufficient.
The Canadian Securities Administrators (CSA), which conducted a review of disclosure practices of both Canadian and U.S. cannabis companies, said some cannabis companies were inconsistent in complying with Canadian securities requirements on issues such as providing forward-looking information and giving guidance for balanced disclosure.
“Licensed cannabis producers often did not provide sufficient information in their financial statements and management’s discussion and analysis for an investor to understand their financial performance,” the CSA said in a report, posted on the websites of provincial securities regulators.
The move comes ahead of next week’s expected legalization of recreational cannabis in Canada. Cannabis stocks have been on a tear over the past year in anticipation of strong demand following legalization. (Reporting by John Tilak, Editing by Rosalba O’Brien)