The Securities Commission has granted an issuer, which is a global cannabinoid company, relief to send proxy-related materials to both registered and beneficial securityholders using a delivery method allowed under U.S. federal securities law. This decision is based on the issuer’s compliance with Rule 14a-16 under the U.S. Securities Exchange Act of 1934, despite the fact that more than 50% of the issuer’s consolidated assets are located in Canada and its business is principally administered in Canada.
The issuer is a reporting issuer in multiple Canadian jurisdictions and the U.S., with its common shares listed on both the Toronto Stock Exchange and NASDAQ. Although the issuer does not qualify as a foreign private issuer under U.S. law, it has a small percentage of Canadian resident securityholders and a majority of its executive officers and directors are U.S. residents.
Under the relief, the issuer will send a notice of internet availability of proxy materials at least 40 days before shareholder meetings, and will make all proxy-related materials accessible online. Securityholders can request paper or email copies of these materials at no charge. The issuer will cover all expenses for printing and delivering the notices.
The decision is contingent on the issuer meeting all other applicable requirements of the Automatic Exemptions, except for the location of assets and the principal administration of the business in Canada, at the time of sending the notification of meeting and record dates.
The relevant laws and regulations underpinning the outcome include National Instrument 51-102 Continuous Disclosure Obligations, National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, and Multilateral Instrument 11-102 – Passport System.