C21 Investments Faces Securities Commission Cease Trade Order Amidst Financial Statement Delay

LOS ANGELES– C21 Investments Inc., a prominent vertically integrated company operating in the cannabis sector, has encountered a significant setback as the British Columbia Securities Commission (BCSC) issued a Cease Trade Order against the company’s securities. The order comes in response to C21 Investments’ failure to file its audited annual financial statements and management discussion & analysis for the fiscal year ending January 31, 2023, along with the requisite CEO and CFO certificates, as mandated by National Instrument 51-102 – Continuous Disclosure Obligations and National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings (collectively referred to as the “Documents”).

This development follows C21 Investments’ recent unaudited year-end results announcement on June 2, 2023, where the company explained the delay in filing the Documents as a necessary measure to address an error in the tax provision for previous years. The restatement of figures related to the tax provision in the 2022 Financial Statements, specifically for the year ending January 31, 2022, is anticipated. Notably, this error, approximately amounting to $1.1 million (pending finalization), had already been reflected in the figures provided in the June 2, 2023 news release. Unfortunately, the company was not informed of this issue in a timely manner to seek a Management Cease Trade Order.

In response to the BCSC’s order, C21 Investments is diligently and expediently collaborating with its current and former auditors to rectify the restatement of the 2022 Financial Statements, complete the audit of the company’s annual financial statements for the fiscal year ending January 31, 2023, and ultimately file the required Documents.

The impact of this Cease Trade Order on C21 Investments is not to be underestimated, as it temporarily halts the trading of the company’s securities, affecting its ability to generate liquidity and engage in investment activities. The BCSC’s regulatory action underscores the significance of compliance with reporting obligations, ensuring transparency and accountability within the financial markets.

Market analysts and stakeholders will be closely monitoring the company’s progress as it works to resolve the financial statement delay and regain compliance with the regulatory requirements. The consequences of this situation extend beyond the company’s immediate operations, as investors and industry observers scrutinize the efficiency of C21 Investments’ internal controls and reporting processes.

As the company strives to navigate through these challenges and rectify its compliance issues, it is evident that the stakes are high for C21 Investments. The coming days will shed light on the efficacy of the company’s efforts to rectify the financial statement error, secure the necessary certifications, and ultimately address the Cease Trade Order imposed by the BCSC.