By Tegan Valentine
Hello, happy new year and welcome back to Top Five Friday Finds – the weekly series where we share five of the business news stories that dominated the papers (and our conversations) this week.
Marijuana dominated the business news in 2017. One of the most notable transactions of the year was the CanniMed hostile takeover, and investments in cannabis companies were among the most profitable for Canadian investors. Well the times (and political landscapes) are a-changin’. Yesterday, U.S. Attorney General Jeff Sessions rescinded a policy that allowed for legalized marijuana to be distributed across the United States without federal intervention – and share prices for Canada’s marijuana companies fell in response. Canada is slated to become a global leader in marijuana production, and many of the country’s cannabis producers have been looking to the United States as a potential market for consumption. Sessions’ announcement has threatened this market, and reduced the potential profitability of Canadian producers. While share prices will likely rebound, Thursday’s market activity shows how susceptible the emerging market of marijuana is to regulation – in Canada and beyond.
Speaking of drops in share prices, when clients of TD Bank’s WebBroker and Royal Bank’s RBC Direct Investing platforms looked to buy or sell corporate shares yesterday, they were met by intermittent service and sporadic outages. TD has indicated that ‘unprecedented’ trading volumes triggered the glitch, with surges in cannabis sector stock trading coinciding with their outages.
What do changes in infrastructure, legalized cannabis and cross-border trade agreements have in common? They are all among the top 10 legal risks facing Canadian businesses in 2018 This week, BLG released its annual legal risk report which sets out the trends and regulatory changes that will shape the coming year. The report points to cybersecurity, infrastructure, cannabis, Aboriginal and treaty rights, tax reform, trade agreements, workplace sexual harasses, climate change and class action lawsuits as top trends in 2018.
Weinstein Co. has been in survival mode since the Fall 2017 revelation that corporate founder (and former chairman) Harvey Weinstein had a long history of sexually abusing actresses and employees. This week, the Wall Street Journal indicated that the company might be close to a sale for less than $500 million. While Weinstein Co. was privately held (and minimal information is available on the company’s pre-scandal value), $500 million is significantly lower than the $1.3Bn in assets the Weinstein Brothers previously claimed the company was worth.
And finally, changes are happening at Canada’s second-largest grocery chain. This week the Sobey family decided to pool all of their Class B voting shares in Empire Co Ltd. (Sobey’s parent corporation) into a single holding company. No word on how this will change company management – but with the family controlling 92.66% of Empire’s outstanding voting common shares, the family is poised to make some significant changes.