The Securities Commission has granted Zenabis Global Inc. (Zenabis) relief from continuous disclosure, certification, and insider reporting requirements following its acquisition by HEXO Corp. (HEXO) through a court-approved plan of arrangement. Zenabis’s only outstanding securities are warrants exercisable for HEXO shares, which do not qualify as designated exchangeable securities under National Instrument 51-102 (NI 51-102). Consequently, Zenabis sought exemptions from the obligations typically imposed on reporting issuers.
The Commission’s decision is based on several conditions, including HEXO’s ownership of all voting securities of Zenabis, HEXO’s compliance with its own continuous disclosure obligations, and Zenabis’s commitment not to issue any new securities to the public except under certain conditions. Zenabis must also file notices or copies of HEXO’s documents and ensure material changes specific to Zenabis are disclosed.
The granted relief aligns with the provisions similar to section 13.3 of NI 51-102, which typically applies to exchangeable security issuers. Additionally, Zenabis is exempted from filing annual and interim certificates as required by National Instrument 52-109, provided it does not file its own financial statements and complies with the conditions of the continuous disclosure exemption.
Insiders of Zenabis are relieved from filing insider reports under National Instrument 55-104 and from the requirement to file an insider profile under National Instrument 55-102, subject to certain conditions, including that they do not receive non-public material information and are not insiders of HEXO in any other capacity.
The decision is supported by the Securities Act, R.S.O. 1990, c. S.5, as amended, and the relevant National Instruments mentioned above. The British Columbia Securities Commission is the principal regulator for this application, and the decision also applies to Ontario and other Canadian jurisdictions where Zenabis is a reporting issuer.