Taking Your Cannabis Company Public In Canada With Marko Glisic - - PowerPoint PPT Presentation

Taking Your Cannabis Company Public In Canada

With Marko Glisic Audit Partner at GreenGrowth CPAs

About Us

• 1000+ Prepared Annual Tax Returns for cannabis operators spread across all verticals:

○ Dispensary, distribution, cultivation, manufacturing, delivery and testing

• 350+ Cannabis Business Clients
• 11+ States that our clients are spread across (CA, OR, WA, CO, MI, OH, OK, DC, HI, AZ, FL)
• 12+ Audit-related and valuation projects in 2018
• Thorough and deep understanding of tax, compliance and assurance related requirements for the cannabis

industry

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Disclaimer

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment,

• r any business advice in general.

Agenda

• Different exchanges in Canada – CSE, TSX, TSXV
• Steps for Going Public
• How long does it take to go public?
• Service providers and partners
• How many years of financial statements need to get filed and audited?
• Auditing standards in Canada
• Financial statement standards in Canada
• Where to look up info of the companies already public
• How much money can be raised?

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

What are the different Canadian exchanges?

• TSX: the main exchange in Canada, equivalent to New York Stock

Exchange.

• TSXV: Canada’s ventures exchange. This is where start up

companies generally go public.

• CSE: similar to TSXV. A newer exchange and generally the application

process is easier. Most cannabis companies go public here

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Steps for Going Public

• We suggest using the RTO (Reverse Takeover Option) vs. the IPO
• The process takes around 13 weeks
• Find a shell company and do due diligence
• File an RTO Circular, prospectus, and disclosure doc
• Hold a shareholder meeting
• Raise capital through secondary offering

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

How long does it take to go public?

• An RTO is estimated to take between 3 - 6 months
• An IPO is estimated to take about a year
• Budget extra time to find a shell company and perform due diligence

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Service Providers and Partners

• There are a number of partners you need to work with to make the

IPO/RTO happen: ○ Lawyers ○ Auditors ○ Investment Bankers

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Financial Statements

• Required to file 3 years of financial statements, MD&A, and pro

formas, including: ○ Net sales/total revenues ○ Net income/loss ○ Total assets and liabilities ○ Cash dividends ○ Quarterly info for each of the eight most recently completed quarters ending at the end of the most recent fiscal year ○ Foreign GAAP ○ Liquidity

• More requirements outlined in CSE Form 2A

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Auditing Standards in Canada

• The Canadian Auditing Standards are the standards accepted in

Canada

• The auditor needs to be registered in Canadian Public Accounting

Board

• The exchanges will in certain cases accept foreign standards, but we

advise for audits to be performed under Canadian Auditing Standards

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Financial Statement Standards in Canada

• The financials need to be in International Financial Reporting

Standards (“IFRS”)

• Couple of new standards to keep in mind is:

○ (a) IFRS 15 Revenue Recognition Standard effective 2018, ○ (b) IFRS 9 Financial Instruments ○ (c) IFRS 16 Leasing Standard effective 2019

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Where to see public companies on the CSE

• To look up info of public companies, go to www.sedar.com and then

go to issuer profiles

• There are now 113 U.S. and Canadian cannabis companies listed on

the CSE

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

How much money can be raised?

“U.S.-affiliated medical cannabis companies dominated Canadian Securities Exchange (CSE) fundraising in 2018, raising nearly $2 billion through 50 equity-related deals.” – Marijuana Business Daily

• Massachusetts-based Curaleaf Holdings (CSE: CURA) and New York-

based Acreage Holdings (CSE: ACRG.U), which led the pack with individual deals valued at more than $300 million each.

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Key Takeaways

• US cannabis companies should explore

the RTO option on the Canadian Securities Exchange

• Be ready to disclose a LOT of financial

information from the last three years

• US cannabis companies are raising

millions of dollars by listing publicly in Canada.

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.