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5 SEC Filings Marijuana Stock Investors Need to Understand

May 8, 2017

As you might already know, the Securities and Exchange Commission, or SEC for short, is the U.S. government agency tasked with ‘policing’ the stock market. One of the responsibilities that falls under this is making sure that publicly traded (or soon to be publicly traded) companies disclose important information about their businesses to the investing public. The SEC performs this role by requiring companies to file formal documents periodically, or upon certain events, in standardized formats, known as filings.


Some of these filings carry much greater importance to investors than others due to the nature of the content within. That being said, here are five common SEC filings that marijuana stock investors should be familiar with.  


10-K - Annual Report


Form 10-K is a standardized Annual Report that most public companies have to file shortly after the end of their fiscal year. 10-K filings have a wealth of information including descriptions of the company's business model, risk factors, legal proceedings, properties, and of course the company's annual audited financial statements.  


10-Q -  Quarterly Report


Form 10-Q filings are shorter versions of their annual cousin, the 10-K. As the "Q" in the name suggests, 10-Qs are required to be filed quarterly by most publicly traded companies. Information in a 10-Q includes unaudited financial statements, management discussion and analysis and updates regarding business developments, risk factors, legal proceedings and changes in accounting practices.


S-1 - Initial Securities Registration Statement


S-1 filings are also known as prospectuses or initial securities registration statements. They are intended to provide investors with information on the securities being offered and the company that is offering them. This information includes the company's business history, management team, operations, historical financial results and potential risk factors.


As many marijuana related companies are either foreign stocks with a secondary U.S. ticker symbol, or companies that became publically traded through a reverse merger or a combination of both, we don't see S-1 filings too often in the cannabis space. That said, if you see one, pay attention as S-1 filings contain a wealth of information, arguably more information than 10-K filings. Also, if a stock you are interested in went public the 'traditional route', go back and read their S-1, even if it's slightly out of date as you'll obtain a better understanding of the company and its history.


8-K - Current Reports


8-K filings are released when a company has important information to release to investors in between 10-K and 10-Q filings. When a company files a 8-K it is based on the occurrence of a specific event, rather than the passing of time. Some events that could require a 8-K filing include mergers and acquisitions, failure to meet exchange listing standards, changes in the board of directors and changes in the company's fiscal year.


DEF 14a - Proxy Statement


Proxy Statements are required to be filed before an annual or special meeting of shareholders. They contain information intended to help investors make informed voting decisions. Remember, one of the rights you have as a shareholder is the right to vote on major corporate decisions. Some of the information you can expect to find in a proxy statement includes the compensation package of top executives and board members, the background and qualifications of board members up for election and any potential conflicts of interest.




Companies are required to release the information contained in these fillings (and other SEC filings), because it's important to investors, but unless you read them they do no good. We hope this guide helps you get more familiar with some of the most important SEC filings for marijuana stock investors (and stock investors generally). Happy Investing!


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