Securities Law & Instruments


Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Confidentiality -- Application by an issuer for a decision that a Management's Discussion & Analysis previously filed and made public on SEDAR be held in confidence for an indefinite period by the Commission, to the extent permitted by law -- Documents contain intimate financial, personal and other sensitive information, the disclosure of which would be seriously prejudicial to the interests of the issuer and other persons affected -- Issuer to file and make public on SEDAR a revised version of the Management's Discussion & Analysis in which the intimate financial, personal and other sensitive information is omitted -- Omitted information would not be material to an investor -- Relief granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 140(1), 140(2).

February 20, 2018

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF MEDRELEAF CORP. (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation), being section 140(2) of the Securities Act (Ontario) (the Act) that the requirement for public inspection of records not apply to the version of the Filer's Management's Discussion and Analysis dated February 12, 2018 (the Filed MD&A) that was filed on the System for Electronic Document Analysis and Retrieval (SEDAR) on February 13, 2018 and that the Filed MD&A be held in confidence (and therefore not available to the public for inspection) for an indefinite period, to the extent permitted by law (the Passport Exemption).

Furthermore, the principal regulator has received a request from the Filer for a decision that the Filer's application be kept confidential and not be made public until the date that is three years after the date of this decision (the Confidentiality Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (the Principal Regulator) is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the provinces and territories of Canada, other than Ontario (the Non-Principal Passport Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. the Filer is a corporation incorporated under the Business Corporations Act (Ontario) on February 28, 2013, as amended on December 16, 2013, March 27, 2015, and June 6 2017;

2. the Filer's head office is located in Ontario, Canada;

3. the common shares of the Filer are listed on the Toronto Stock Exchange;

4. the Filer is a reporting issuer in each of the provinces and territories of Canada and is not in default of its reporting issuer obligations under the securities legislation of the Principal Regulator or any of the Non-Principal Passport Jurisdictions;

5. on February 13, 2018, the Filer filed the Filed MD&A on SEDAR in accordance with sections 5.1 of National Instrument 51-102 Continuous Disclosure Obligations containing certain information (the Confidential Information) that is subject to a confidentiality agreement (the Confidentiality Agreement);

6. it came to the Filer's attention that the Confidentiality Agreement states that each party is precluded from making any public comment, statement or communication with respect to any business arrangements between the parties without the written consent of the other party and the counterparty to the Confidentiality Agreement would not consent to the disclosure of the Confidential Information;

7. the Filer believes that continued public access to the Confidential Information would seriously prejudice the interests of the Filer for the following reasons:

a) maintaining the confidentiality of the Confidential Information is important to the relations of the Filer with the counterparty to the Confidentiality Agreement, with whom the Filer has a commercial relationship, as well as the Filer's ability to negotiate future transactions;

b) disclosure of the Confidential Information is not required to understand the Filer's Management Discussion & Analysis (MD&A);

c) the making and keeping private of the Confidential Information will not adversely affect investors or impact the decision by an investor for the purposes of making any investment decision with respect to the Filer; and

d) the desirability of avoiding disclosure of the Confidential Information in the interests of the Filer and the other parties affected outweighs the desirability of adhering to the principle that material filed with the principal regulator be available to the public for inspection and the disclosure of the Confidential Information is not necessary in the public interest;

8. following discussions with staff of the Principal Regulator, on January 14, 2018 the Filer filed a revised MD&A with the Confidential Information removed on SEDAR and staff of the Principal Regulator temporarily marked the Filed MD&A private on SEDAR pending the decision of the Principal Regulator;

9. the Filer acknowledges that making the Filed MD&A private on the SEDAR website does not guarantee that the Filed MD&A is not available elsewhere in the public domain.

Decision

10. The Principal Regulator is satisfied that the decision meets the test set out in the Legislation for the Principal Regulator to make the decision.

11. The decision of the Principal Regulator under the Legislation is that the Passport Exemption is granted.

12. The further decision of the Principal Regulator is that the Confidentiality Relief is granted.

"Janet Leiper"
Commissioner
Ontario Securities Commission
 
"Deborah Leckman"
Commissioner
Ontario Securities Commission