Marijuana Business Magazine May-June 2019

Marijuana Business Magazine | May-June 2019 98 These are among the factors that explain why the cannabis industry has a corporate governance problem. It’s a challenge that executives at publicly traded cannabis companies can ill afford to ignore, lest they risk incurring the wrath of investors and consumers—or landing in hot water. Consider two recent cases: • Toronto-based e-commerce company Namaste Technologies fired its CEO, Sean Dollinger, in February, citing alleged breaches of fiduciary duty and self-dealing involving the sale of Namaste’s American subsidiary, Dollinger Enterprises US. The two sides ultimately reached a settlement, which allowed Dollinger to stay on in a senior advisory role. In March, however, PriceWaterhouseCoopers resigned as Namaste’s auditor on the same day Namaste disclosed it carried out a strategic review “to streamline the business and ensure compliance throughout the organization.” The rough-and-tumble nature of an emerging industry. Company founders with potential black marks on their record. Heavy—and often-changing—regulations.