The Ontario Securities Commission (OSC) granted exemptive relief to wholly-owned subsidiaries of Tilray Brands, Inc. (Tilray) from certain continuous disclosure and insider reporting requirements, following Tilray’s acquisition of HEXO Corp. (HEXO) and 48NORTH Cannabis Corp. (48North). The decision, made under section 13.1 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), exempts HEXO and 48North from the continuous disclosure requirements, and insiders of these subsidiaries from insider reporting requirements, provided specific conditions are met.
The key conditions for the exemption include Tilray’s ownership of all voting securities of HEXO and 48North, Tilray’s status as a reporting issuer in good standing, and the absence of public issuance of securities by HEXO and 48North other than certain specified instruments. Additionally, HEXO and 48North must file notices indicating reliance on Tilray’s disclosure documents or provide copies of Tilray’s filings. Tilray must also send HEXO and 48North warrant holders all disclosure materials required for similar Tilray warrants and comply with public disclosure of material information.
The decision also revokes a previous order (the 48North Order) and replaces it with the current decision, which is substantially similar. The relief is granted under the applicable legislative provisions, including the Securities Act, R.S.O. 1990, c. S.5, as amended, and various National Instruments related to continuous disclosure, certification of disclosure, and insider reporting.
The OSC’s decision is based on the rationale that post-arrangement, the information of primary importance to the holders of HEXO and 48North securities will relate to Tilray, not the subsidiaries. The decision aims to reduce the regulatory burden on the subsidiaries while ensuring that investors receive meaningful information through Tilray’s disclosures.