This content is made possible by our sponsors. Learn more about our OBJ360 content studio here.

Securities law: What entrepreneurs need to know

Perley-Robertson, Hill & McDougall offers insights on changing securities regulations

Perley lawyers
Perley lawyers

Legalized marijuana and digital currencies have generated attractive returns for early backers who timed their investments right. However, new regulations, cross-border complexities and growing fraud concerns are creating new wrinkles for entrepreneurs looking to capitalize on these rapidly growing sectors.

“These areas of business are two of the most exciting things that are currently going on and getting lots of attention,” says Robert Kinghan, Partner and Head of the Business Law Group at Perley-Robertson, Hill & McDougall.


The popularity of cryptocurrencies such as Bitcoin rapidly rose among adherents drawn to its decentralized nature, free from the control of central banks and major financial institutions, as well as those who believed the value of various digital currencies would appreciate.

But the technology used to offer the so-called digital “tokens” for sale is entirely different from what’s used in traditional securities offerings.

“It’s like trying to fit a square peg in a round hole,” says Conor Cronin, an associate at Perley-Robertson, Hill & McDougall. “Everyone is still trying to figure it all out and regulators are paying close attention.”

For starters, cryptocurrencies are bought and sold online, but are currently unavailable on any regulated Canadian stock exchanges.

“Buying tokens is like offshore gambling,” says Kinghan. “You’re buying something in a (grey) market.”

The firm is at the forefront of efforts by entrepreneurs to change that.

The Ontario Securities Commission generally categorizes cryptocurrencies as securities and requires issuers to comply with applicable securities laws.

Perley-Robertson, Hill & McDougall is currently working with clients interested in obtaining OSC approval of the offerings of their tokens, which would be the first in Canada.


Investors around the world have taken note of Canada’s legalization of cannabis for recreational use – a move that effectively created a multibillion-dollar industry virtually overnight.

Amid this inflow of foreign capital, the OSC has taken steps to formalize the process for reporting issuers to issue stock to international investors in certain foreign jurisdictions and comply with reporting requirements.

Kinghan believes that even more foreign investors will come into the cannabis market. While that’s great news for producers in this country, cannabis companies – and any Canadian public company taking foreign capital – should make sure they’re doing their due diligence.

“For example, in the case of a U.S. resident investor, the U.S Securities and Exchange Commission might say because you have American investors, you have to comply with SEC laws too,” Cronin says. Accepting foreign investors may also require the company to comply with various anti-terrorism, money laundering and corruption regulations.

Capital markets have been flourishing. Perley-Robertson has been involved in a number of recent transactions including $13.75 million bought deal, reverse takeovers, qualifying transactions and over $100 million in various brokered and non-brokered financial transactions for listed companies here in Ottawa, Toronto and across Canada.

For more information, visit the Perley website.