OSC asks court to approve settlement with cannabis company Cronos, former CFO – Toronto
The Ontario Securities Commission is asking the Capital Markets Court to approve a settlement with an Ontario cannabis company and one of its former executives who the regulator says failed to file accurate financial statements.
In a court filing on Thursday, the OSC says Toronto-based Cronos Group Inc. incorrectly recognized $7.6 million in revenue in its first, second and third quarter financial statements filed in 2019.
The regulator also accuses the company of overstating “substantially all” of its US goodwill and a “significant” portion of its US intangible assets by approximately US$234.9 million in its second-quarter 2021 interim financial statements. .
The CSO says some of the revenue errors were caused by dried flower transactions counted as revenue “lacking commercial substance” and placed some of the blame on former chief financial officer William Hilson, who it says has not taken appropriate action to resolve these issues. problems.
Cronos corrected the errors but pointed to “significant weaknesses in internal control over financial reporting”. The OSC says the errors violate Ontario securities law and are contrary to the public interest.
The OSC and Cronos declined to discuss the matter further, and Hilson did not immediately respond to a request for comment.