Article content continued

“We’ve got deals that are back on after two-and-a-half weeks. Everybody has been sitting on the sidelines, and now it’s go, go, go again,” said Eric Foster, a partner at Dentons Canada LLP, who leads the law firm’s cannabis group.

“Effectively what it says is it’s business as usual…. They’ve said these are companies that are allowed to list in Canada, individual exchanges can make their own decisions as to whether to list these entities. Really it just increased the disclosure,” he added.

Companies will be required to disclose more information about potential risks related to their own U.S. operations and those of third-party partners. The CSA warned that companies that don’t comply with the enhanced disclosure rules could face punishment.

“We view this development positively for Canadian-listed companies with U.S. operations, as it significantly reduces their risk profile, and may be the spark investors need to take advantage of attractive valuation opportunities,” Russell Stanley, an analyst with Echelon Wealth Partners, wrote in a note to clients.

“Today’s ruling is really just a reconfirmation of their earlier view,” saidMarc Lustig, CEO of Ottawa-based CannaRoyalty Corp., which operates in California, Washington and Arizona.“It’s extremely positive not just for Canadian companies like CannaRoyalty that have U.S. assets, but it’s quite positive for the Cannabis sector as a whole.”

The lack of clarity around the CSA’s position meant CannaRoyalty, which focuses on research, cannabis devices and intellectual property, had to put a number of potential partnerships with Canadian producers on hold.

“The fact that we’re commercializing our IP in the U.S. … left Canadian licensed producers reluctant (to talk) until there was clarity that they weren’t tainting the water, so to speak,” said Lustig.

In the hours after the CSA released its decision on Thursday afternoon, Lustig said he had a number of discussions with Canadian LPs about potential deals that had been put on hold.