Guide

Governance in a Nascent Industry: Lessons from Canada’s “Green Rush”

Chapter 9 of Davies Governance Insights 2020

In the two years that have passed since Canada became the first industrialized country to legalize recreational cannabis use, the industry has experienced unprecedented levels of growth and interest, a phenomenon widely referred to as Canada’s “Green Rush.” Such rapid development, however, has not occurred without significant challenges – particularly in the realm of corporate governance. In this chapter, we draw upon core lessons learned from Canada’s burgeoning cannabis industry to examine three key governance practices that should be considered by junior issuers or those operating in other nascent industries. In our view, proactive actions, such as installing an independent and experienced board at the outset that oversees key operations, establishing robust internal controls and risk management frameworks, combined with transparent and timely disclosure practices, will best position issuers for future success.

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This chapter appears in the 2020 edition of Davies Governance Insights, our comprehensive annual report on the trends and issues most important to Canadian public companies.

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