June 15, 2018
Partner Cheryl Reicin has told Marijuana Business Daily many cannabis companies are “still playing catchup on basic corporate governance controls” as they fight to raise capital in a fledgling industry.
The article discusses some of the corporate governance control companies can adopt and lists five steps that marijuana firms should take as both they and the industry grow. This list focuses on things like independence, conflict of interest, and gender diversity.
Cheryl told Marijuana Business Daily companies leaders displaying “integrity and independence” was imperative in order to make themselves attractive to institutional investors.
“Many of these companies began because friends and people who knew each other in the industry decided to get together,” Cheryl said.
“That’s not a misstep.
“But as these companies grow, investors will want to know that board members have the integrity and independence needed to stand up and speak up for what’s right for shareholders.”
Cheryl also discussed the importance of creating an executive committee which would allow a company to stay sharp and enable them to act quickly when required.
“This is not to say that you should create an executive committee to make major decisions instead of going to the board,” Cheryl told Marijuana Business Daily.
“But rather a subgroup of the board with limited power to vote on items you may not need the entire board to meet to review.”
Torys lawyers have written extensively about cannabis. You can read the team’s thought leadership on the Emerging Trends in the Cannabis Industry Page.
To learn more about Torys’ Board Advisory and Governance Practice, head to the relevant practice page.