Canadian Lawyer InHouse

December/January 2021

Legal news and trends for Canadian in-house counsel and c-suite executives

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Page 30 of 43 29 Fonar. "I've always told my team it's important to have a defendable position in this industry with new regulations and legislation." Cannabis companies should pay attention to good business practices and good gover- nance practices more than ever before, according to Michael Posnikoff, partner at Norton Rose Fulbright Canada LLP. "It makes sense to implement environ- mental, social and governance practices now, because investors — if they are investing in the future — are going to be looking to companies that have good structure and good practices in place in that area," says Posnikoff. He also recommends being proactive in terms of restructuring operations to ensure efficiencies and understanding your customer. "I think there is going to be an increased emphasis on data collection, in terms of getting to know your customers and tailoring your product offerings to the demographic you are trying to reach," he says. In-house counsel at companies that were active in acquiring assets and entering into contractual agreements during the past two years should reassess the prices they are paying for products and the supplier they are using, says Nyberg. "I see cannabis companies taking a more cautious approach that's consistent with a maturing industry." Companies that are in a good financial position will be able to take advantage of some great acquisition opportunities in the next year to 18 months, says Posnikoff. "I think the long-term prognosis is fairly optimistic," he says. "We will see some consolidation with stronger, healthier businesses moving forward." Nyberg is also cautiously optimistic for the future of the industry. "Cannabis is a lot like liquor and some other products that aren't as easily damaged by a recession," he says. "We're starting to see quite a lot of commercial activity where people are developing relationships and we're starting to see a supply chain form." Challenges are to be expected. As Shaer notes, "I've been in this industry for five years now and there's always something we've got to encounter. That's kind of the gig." "We are certainly seeing more bankruptcies in the industry and more issues with balance sheets and cash flows, and there will likely be a lot of distressed assets, which means a lot of opportunities." Mariana Fonar, Lift & Co. Corp

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