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Wake up: The Securities Authority warns against unfounded investments in Cannabis shares

Months later, the Israel Securities Authority (ISA) was reminded this week to publish a warning and details to investors that they should carefully examine the shares of the new cannabis on the stock exchange and the announcements published by these companies.

The Securities Authority issued a warning to the public on Wednesday regarding the shares of the new cannabis. The announcement comes a few months after similar announcements by the SEC authorities U.S וCanada, Which warned investors of inaccurate or insufficiently publicized announcements from public companies.

"Over the past year, a growing number of public companies whose shares are traded on the Tel Aviv Stock Exchange have reported their intentions to operate in the field of medical cannabis," the statement said. "So far, only some of these companies have completed deals aimed at infusing real business activity into the field of medical cannabis."

The ISA wishes to draw the attention of investors to a number of parameters relating to public companies operating or expected to operate in the field of medical cannabis when making investment decisions in the securities of these companies.

They also detail the procedures for establishing new Cannabis businesses as part of the reform, so that investors will be familiar with the requirements that companies must comply with, so that they can test whether they are in place.

"Before making an investment in public cannabis companies operating in Israel, it is necessary to understand which 'preliminary approvals' or 'conformances', if any, are held by the said companies, and what the practical significance of these approvals is," it says.

"The Authority's staff sees fit to draw the attention of the investors to the fact that in accordance with the road map, it has become a legal entity that it has received OK Compliance with the standard can not operate in the relevant area, since it must be an owner license In order to be able to perform actions that involve any contact with the cannabis plant. "

The new directive states that "as long as the legal entity does not complete the process of obtaining the relevant license, as detailed in the road map, it will not be able to operate in the same area" .

Even if the export of medical cannabis from Israel is finally approved, contrary to press reports Not yet finally approved"There is no certainty that each of the public cannabis companies will receive such a permit, and therefore there is a regulatory uncertainty regarding the ability of any public cannabis company to export medical cannabis products abroad," they say.

"Some of the public cannabis companies frequently publish immediate reports about their intention to operate in the medical cannabis field, memorandums of understanding on transactions, cooperation, etc.," they added. "The Authority's staff draws the attention of the investors to the fact that the immediate report of a public cannabis company on the intention to examine entry into medical cannabis activity or the signing of a memorandum of understanding does not guarantee that the company will indeed operate in the field and therefore such reports should be taken with due caution."

In the matter of valuations, the Authority notes that there are companies that published information that is allegedly inaccurate and without proper disclosure. In conclusion, they state that "it is important that investors devote the proper attention to examining the investment in this area."

Full post Here.