Canopy Growth Corp T.WEED

Legal Test for halting or delisting TSX company

[Monteviale]

I thought I would try and up the discussion on this board tonight.  I know there are a lot of people interested in what the legal test is to halt or delist a company from the TSX.  If you believe the test is different from what I posted I would be interested in hearing your reasons.  I also came to conclusion that there is zero chance of Aphria being delisted, but please feel free to disagree and explain why you disagree.  

Interesting to note that the TSXV and the TSX have different listing requirements that they must comply with.   

The TSXV’s Listing Agreement requires that a listed issuer agree to comply with all laws, rules and regulations applicable to its business or undertaking, although the TSX’s Listing Agreement does not contain such language.  

TSXV Listing Agreement

TSX Listing Agreement

In fact, no aspect of the TSX’s Company Manual actually specifies that issuers must comply with the laws of their jurisdictions, although section 701 of the Manual states that the TSX may suspend or delist an issuer if “such action is necessary in the public interest”.  

Section 701 of Manual

TMX spokeswoman Catherine Kee has said that the Exchange mandates that all listed companies are expected to comply with relevant laws and regulations in the jurisdictions in which they operate, and that “each issuer is handled on a fact-specific basis”.

The test for suspending or delisting an issuer listed on the TSX is whether "such action is necessary in the public interest".  Thats why TMX has issued a statement that each case case is handled on a fact-specific basis.  

IMO the chances of Aphria being suspended or delisted is zero.  There are those that would argue that such acion is necessary in the public interest, (anyone can argue anything), however the case for such argument is weak at best.

In the unlikely event that the TSX ever did decide against Aphria, the decsion would IMO be overturned in the courts. 

This is why Lou Eccleston CEO of TMX has come out and confirmed that the TMX Group does not expect to issue a cannabis specific listing policy.  You can't retroacively draft a policy and then rely on it to suspend or delist a compnay.  Worst case scenario is you draft a polciy that pertains to future listings and grandfathers in those companies already listed on the TSX.  

The only issue to be resolved is the CDS and although I've made  my opinion clear in previous posts, I will deal with the CDS in one final post at a later date.  

M