Financial reporting and accounting advisory services
You trust your external auditor to deliver not only a high-quality, independent audit of your financial statements but to provide a range of support, including assessing material risks, evaluating internal controls and raising awareness around new and amended accounting standards.
Accounting Standards for Private Enterprises
Get the clear financial picture you need with the accounting standards team at Grant Thornton LLP. Our experts have extensive experience with private enterprises of all sizes in all industries, an in-depth knowledge of today’s accounting standards, and are directly involved in the standard-setting process.
International Financial Reporting Standards
Whether you are already using IFRS or considering a transition to this global framework, Grant Thornton LLP’s accounting standards team is here to help.
Accounting Standards for Not-for-Profit Organizations
From small, community organizations to large, national charities, you can count on Grant Thornton LLP’s accounting standards team for in-depth knowledge and trusted advice.
Public Sector Accounting Standards
Working for a public-sector organization comes with a unique set of requirements for accounting and financial reporting. Grant Thornton LLP’s accounting standards team has the practical, public-sector experience and in-depth knowledge you need.
Tax planning and compliance
Whether you are a private or public organization, your goal is to manage the critical aspects of tax compliance, and achieve the most effective results. At Grant Thornton, we focus on delivering relevant advice, and providing an integrated planning approach to help you fulfill compliance obligations.
Research & development, government incentives
Are you developing innovative processes or products, undertaking experimentation or solving technological problems? If so, you may qualify to claim SR&ED tax credits. This Canadian federal government initiative is designed to encourage and support innovation in Canada. Our R&D professionals are a highly-trained, diverse team of practitioners that are engineers, scientists and specialized accountants.
Keeping track of changes and developments in GST/HST, Quebec sales tax and other provincial sales taxes across Canada, can be a full-time job. The consequences for failing to adequately manage your organization’s sales tax obligations can be significant - from assessments, to forgone recoveries and cash flow implications, to customer or reputational risk.
US corporate tax
The United States has a very complex and regulated tax environment, that may undergo significant changes. Cross-border tax issues could become even more challenging for Canadian businesses looking for growth and prosperity in the biggest economy in the world.
Cross-border personal tax
In an increasingly flexible world, moving across the border may be more viable for Canadians and Americans; however, relocating may also have complex tax implications.
While there is great opportunity for businesses looking to expand globally, organizations are under increasing tax scrutiny. Regardless of your company’s size and level of international involvement—whether you’re working abroad, investing, buying and selling, borrowing or manufacturing—doing business beyond Canada’s borders comes with its fair share of tax risks.
Transfer pricing is a complex area of corporate taxation that is concerned with the intra-group pricing of goods, services, intangibles, and financial instruments. Transfer pricing has become a critical governance issue for companies, tax authorities and policy makers, and represents a principal risk area for multinationals.
Succession & estate planning
Like many private business owners today, you’ve spent your career building and running your business successfully. Now you’re faced with deciding on a successor—a successor who may or may not want your direct involvement and share your vision.
Tax Reporting & Advisory
The financial and tax reporting obligations of public markets and global tax authorities take significant resources and investment to manage. This requires calculating global tax provision estimates under US GAAP, IFRS, and other frameworks, and reconciling this reporting with tax compliance obligations.
Our transactions group takes a client-centric, integrated approach, focused on helping you make and implement the best financial strategies. We offer meaningful, actionable and holistic advice to allow you to create value, manage risks and seize opportunities. It’s what we do best: help great organizations like yours grow and thrive.
We bring a wide range of services to both individuals and businesses – including shareholders, executives, directors, lenders, creditors and other advisors who are dealing with a corporation experiencing financial challenges.
Market-driven expertise in investigation, dispute resolution and digital forensics
Viruses. Phishing. Malware infections. Malpractice by employees. Espionage. Data ransom and theft. Fraud. Cybercrime is now a leading risk to all businesses.
Running a business is challenging and you need advice you can rely on at anytime you need it. Our team dives deep into your issues, looking holistically at your organization to understand your people, processes, and systems needs at the root of your pain points. The intersection of these three things is critical to develop the solutions you need today.
Updates for creditors, limited partners, investors and shareholders.
ASPE Sec. 3041 Agriculture Understanding and applying the new ASPE Section 3041 AgricultureThe Canadian Accounting Standards Board (AcSB) has released new guidance on recognizing, measuring and disclosing biological assets and the harvested products of bio assets.
Tax alert Agricultural Clean Technology ProgramThe Agricultural Clean Technology Program will provide financial assistance to farmers and agri-businesses to help them reduce greenhouse gas (GHG) emissions.
Tax alert ACT Program – Research and Innovation Stream explainedThe ACT Research and Innovation Stream provides financial support to organizations engaged in pre-market innovation.
Tax alert ACT Program – Adoption Stream explainedThe ACT Adoption Stream provides non-repayable funding to help farmers and agri-business with the purchase and installation of clean technologies.
Builders And Developers
Every real estate project starts with a vision. We help builders and developers solidify that vision, transform it into reality, and create value.
Rental Property Owners And Occupiers
In today’s economic climate, it’s more important than ever to have a strong advisory partner on your side.
Real Estate Service Providers
Your company plays a key role in the success of landlords, investors and owners, but who is doing the same for you?
There’s no business quite like mining. It’s volatile, risky and complex – but the potential pay-off is huge. You’re not afraid of a challenge: the key is finding the right balance between risk and reward. Whether you’re a junior prospector, a senior producer, or somewhere in between, we’ll work with you to explore, discover and extract value at every stage of the mining process.
Oil & gas
The oil and gas industry is facing many complex challenges, beyond the price of oil. These include environmental issues, access to markets, growing competition from alternative energy sources and international markets, and a rapidly changing regulatory landscape, to name but a few.
For growing companies in the cannabis sector, doing an initial public offering (IPO) might appear to be a good strategy if you have outgrown your current financing options. IPOs can be an effective way to raise capital for innovation and expansion, especially in a resource-intensive sector such as cannabis. It does come with new requirements, however, as becoming a public company may mean changing corporate governance, and potentially reshaping corporate culture. It also requires an understanding of market conditions, and for the cannabis sector, those conditions are currently exceptionally challenging.
Going public is a major decision that reshapes not only how a company is funded, but how it operates. This is more than just “scaling up” – it is a strategic decision that can bring unexpected advantages and pitfalls. For the cannabis sector, there are unique factors that arise from fast growth and an evolving regulatory environment, as well as investor sentiment and general market conditions. Cannabis businesses that are considering going public should weigh their options carefully before making a decision. At a minimum, leadership should have a very clear understanding of why and how public ownership would bring value to their operations and have a vision for what a successful transition looks like.
Why IPO? Start with what ‘value’ looks like
Going public should be driven by enhancing value – and that value can take different forms. Is the objective to expand operations to new sectors and product lines, to fund operations, or to provide an exit to the company’s investors? All of those are good reasons for going public, but they bring different considerations at the planning stage.
To help ensure a successful IPO, cannabis companies should first determine the longer-term business strategy, and then define their funding milestones. This means they should define what the strategic milestones are, how much funding is required at each stage, and allocate the planned capital raise to specific objectives in a pre-determined timeframe. The purpose is to match the path to growth with the capital being raised in the IPO. If the path is set out in a detailed way, and the planned capital raise is allocated to specific strategic milestones, then the IPO is more likely to be successful.
If the company is planning an exit because of a pre-existing commitment to investors, the transition to a new corporate structure or funding model should be as smooth as possible and should not impact operations. In this scenario, it is still imperative that leadership articulate a specific and credible plan for how the business is going to be sustained post-IPO.
Have you considered alternatives to an IPO?
Given the current market environment, cannabis companies seeking growth funding might also want to consider other options, such as late-stage venture capital or strategic partnerships. For some, these might provide more favourable conditions and long-term outcomes than going public in this challenging environment.
The cost of public transparency
Public companies must be more transparent than their private counterparts, because they have accepted money from a broad group of retail investors. They are subject to ongoing disclosure requirements and are generally answerable to a larger group of stakeholders than privately-held companies. Business challenges, when they arise, require more time and effort to respond to as there will be a broader group of investors to communicate with and manage. Share prices may become volatile and remain so until they are resolved.
The cannabis market is facing headwinds, as certain IPOs were met with difficult market conditions in 2019. The high-profile listings of Aurora, Canopy Growth and Tilray have all faced volatility in 2019, partly due to supply and distribution concerns. This was followed by class action litigation in the U.S. involving all three producers, as well as other major cannabis producers in Canada. Each producer is alleged to have overestimated demand for their products, and overstated their revenue projections in regulatory filings.
Another challenge faced by the sector is cautious investor sentiment. Most buyers of cannabis stock have been retail investors who, unlike institutional investors, are more likely to sell their stock in response to short-term market conditions.
The challenging IPO environment isn’t limited to cannabis companies. Although the regulatory environment in the cannabis sector is unique, broader market conditions might also be impacting IPO pricing across all sectors. There have recently been signs of concern across the market at the number of unprofitable companies seeking to IPO, and the valuations of those companies.
Managing the IPO process with minimal disruption
Before filing an IPO in Canada, a company must have a minimum of two years of audited or auditable financial statements under International Financial Reporting Standards (IFRS). Once this information is available, the IPO process typically lasts three to six months.
While this might seem like a short period of time, it is very resource intensive. Total documentation is at least 150 pages of technical financial and legal information, including annual and interim financial statements, management discussion and analysis, a plan for raising capital and a plan for how this capital will be spent. Because of the amount of financial information involved, this is often a CFO-led process, but it also draws upon other C-suite resources.
A strong leadership team is essential
Companies contemplating an IPO should also be prepared for the demands this will place on their whole executive team, and plan for this disruption. If the management team has no direct IPO experience, they will likely work more closely with professionals such as legal counsel and accounting advisors. Even if they have never managed an IPO before, they should have a strong background in financial management, governance and business administration. Entrepreneurs often bring a diverse skillset, such as technology and engineering, however in the context of an IPO, it is imperative that the management team has skills to manage a public company.
Professional advisors help maximize value
As the IPO process can be complex and time-consuming, professional advisors can help you make sense of your financial and market picture, maximize your value proposition and minimize any disruption on operations. Experienced professionals can also help ensure that IPOs support company strategy, while setting achievable objectives for growth.
Although market conditions remain challenging in the cannabis industry, there will be room for growth for companies with a sound value proposition. Your Grant Thornton advisor can help you determine whether an IPO is the right next step for your company and unlock new opportunities.