Grown Rogue International (GRUSF) Risk Analysis
Risk Overview Q1, 2026
Source: the company's latest filing for the period ended Mar 31, 2026, filed May 12, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") could have a material adverse effect on our business and our operating results.
If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common shares. Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, we are required to prepare assessments regarding internal controls over financial reporting. In connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover "material weaknesses" in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The PCAOB defines "significant deficiency" as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected. In the event that a material weakness is identified, we will employ qualified personnel and adopt and implement policies and procedures to address any material weaknesses that we identify. However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls over our financial process and reporting in the future. A failure remediate any material weaknesses that we may identify or to implement new controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could adversely affect the results of the management evaluations of our internal controls. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares. Risks Factors Relating to Our Business
- Corporate Activity and Growth - Risk 2Difficulty Implementing Business Strategy
Our growth and expansion is heavily dependent upon the successful implementation of our business strategy. There can be no assurance that we will be successful in the implementation of our business strategy.
- Corporate Activity and Growth - Risk 3Risks Associated with Acquisitions. See Item 4.A "History and Development of the Company"
Risks Associated with Acquisitions. Subsequent to the year ended August 31, 2017, the Company executed a non-binding Letter of Intent with Grown Rogue Unlimited, LLC, an Oregon limited liability company ("Grown Rogue") according to which it is contemplated that the Company will combine its business operations with Grown Rogue (the "Transaction") resulting in a reverse take-over of the Company by Grown Rogue (See Item 4.A "History and Development of the Company"). As part of our overall business strategy, the Company intends to pursue select strategic acquisitions, which may provide additional product offerings, vertical integrations, additional industry expertise, and a stronger industry presence in both existing and new jurisdictions. Future acquisitions may expose us to potential risks, including risks associated with: (a) the integration of new operations, services and personnel; (b) unforeseen or hidden liabilities; (c) the diversion of resources from our existing business and technology; (d) potential inability to generate sufficient revenue to offset new costs; (e) the expenses of acquisitions; or (f) the potential loss of or harm to relationships with both employees and existing users resulting from our integration of new businesses (g) industry specific risks associated with any such acquisition, including but not limited to potential risks associated with the cannabis industry. In addition, any proposed acquisitions may be subject to regulatory approval.
Risk Highlights Q1, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 56
- Share Price & Shareholder Rights - Risk 1We are an "emerging growth company" and a "smaller reporting company," and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our SV Shares less attractive to investors.
We are an "emerging growth company," as defined in the Securities Act, as modified by the Jump Start Our Business Startups Act of2012 ("JOBS Act"). For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), (ii) having the option of delaying the adoption of certain new or revised financial accounting standards,(iii) reduced disclosure obligations regarding executive compensation in our periodic and annual reports, and (iv) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until such time that we are no longer an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold shares. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our SV Shares pursuant to an effective registration statement under the Securities Act, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We are also a "smaller reporting company" as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting classes of share capital held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting classes of share capital held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter. It is possible that some investors will find our SV Shares less attractive as a result of the foregoing, which may result in a less active trading market for our SV Shares and higher volatility in our share price.
- Share Price & Shareholder Rights - Risk 2Volatility in our SV Share price may subject us to securities litigation, thereby diverting our resources that may have a material effect on our profitability and results of operations.
The market for our SV Shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. This type of litigation could result in substantial costs and could divert management's attention and resources.
- Share Price & Shareholder Rights - Risk 3Applicable SEC rules governing the trading of "penny stocks" limit the trading and liquidity of our SV Shares and may affect the trade price for our share capital.
Our SV Shares are covered by SEC rules related to "penny stocks." The penny stock rules require a broker-dealer to, among other things, deliver their customers a standardized risk disclosure document with information about penny stocks and the nature and level of risk in the penny stock market, and current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that the broker-dealer make a special written determination that the penny stock is a suitable investment for the customer and receive the customer's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our SV Shares and may affect the ability of broker-dealers to trade our SV Shares. We expect that the penny stock rules will discourage investor interest in and limit the marketability of our SV Shares.
- Share Price & Shareholder Rights - Risk 4Our shareholders may experience dilution as a result of the exercise of outstanding restricted share units and share purchase options, as well as a result of our future issuance of additional SV Shares or other securities.
Our organizational and corporate documents authorize the issuance of an unlimited number of SV Shares and multiple voting shares (collectively, the "Shares"), without par value. In the event that we are required to issue additional Shares or other securities exercisable for or convertible into additional shares, enter into private placements to raise financing through the sale of Shares or other securities, the interests of our existing shareholders will be diluted and existing shareholders may suffer dilution in their net book value per SV Share depending on the price at which such Shares or other securities are sold. If we do issue additional Shares, it will cause a reduction in the proportionate ownership and voting power of all existing shareholders. As of December 31, 2025, we had 13,890,000 outstanding share purchase options at a weighted average exercise price of $0.45 (CAD$0.61) per SV Share and 1,496,500 outstanding restricted share units at a weighted average exercise price of $0.65 (CAD$0.89) per SV Share. As of December 31, 2024, we had 15,365,000 outstanding share purchase options at a weighted average exercise price of $0.37 (CAD$0.51) per SV Share and 725,700 outstanding restricted share units at a weighted average exercise price of $0.63 (CAD$0.86) per SV Share. As of December 31, 2025, we had 4,000,000 outstanding share purchase warrants at a weighted average exercise price of $0.16 (CAD$0.225) per SV Share. As of December 31, 2024, we had 4,000,000 outstanding share purchase warrants with a weighted average exercise price of $0.16 (CAD$0.225) per SV Share.
- Share Price & Shareholder Rights - Risk 5We do not anticipate paying dividends on our SV Shares.
We do not anticipate paying cash dividends on our SV Shares in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally available to pay dividends, we may nevertheless decide, in our sole discretion, not to pay dividends. The declaration, payment, and amount of any future dividends will be made at the discretion of our Board, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our Board may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.
- Share Price & Shareholder Rights - Risk 6Our investors may have difficulty selling our SV Shares as there is a limited public trading market for such shares.
An investor in Grown Rogue may find it difficult to resell our SV Shares. There is only a limited public market for our SV Shares, and no assurance can be given that a broad or active public trading market will develop in the future or, if developed, that it will be sustained. Our SV Shares trades on the OTC Venture Market and the Canadian Securities Exchange (the "CSE"). Our SV Shares have not been qualified under any applicable U.S. state blue-sky laws, and we are under no obligation to so qualify or register your SV Shares or otherwise take action to improve the public market for such securities. Our SV Shares could have limited marketability due to the following factors, each of which could impair the timing, value and market for such securities: (i) lack of profits; (ii) need for additional capital; (iii) limited public market for such securities; (iv) the applicability of certain resale requirements under the Securities Act; and (v) applicable blue sky laws and the other factors discussed in this Risk Factors section.
- Share Price & Shareholder Rights - Risk 7The market price of our SV Shares is subject to volatility.
The market price for our SV Shares may be volatile and is subject to significant fluctuations in response to a variety of factors, including the liquidity of the market for our SV Shares, variations in our quarterly operating results, regulatory or other changes in the cannabis industry generally, announcements of business developments by us or our competitors, litigation, changes in operating costs and variations in general market conditions. Because we have a limited operating history in the cannabis industry, the market price for our SV Shares may be more volatile than that of a seasoned issuer. Changes in the market price of our SV Shares may have no connection with our operating results. No predictions or projections can be made as to what the prevailing market price for our SV Shares will be at any time.
- Share Price & Shareholder Rights - Risk 8Our investors may have difficulty selling our securities as there is a limited public trading market for such securities.
An investor in the Company may find it difficult to resell our securities. There is only a limited public market for our securities, and no assurance can be given that a broad or active public trading market will develop in the future or, if developed, that it will be sustained. Our Subordinate Voting Shares ("SV Shares") trades on the OTC Venture Market and the Canadian Securities Exchange (the "CSE"). Our SV Shares have not been qualified under any applicable U.S. state blue-sky laws, and we are under no obligation to so qualify or register your SV Shares, or otherwise take action to improve the public market for such securities. Our SV Shares could have limited marketability due to the following factors, each of which could impair the timing, value and market for such securities: (a) lack of profits; (b) need for additional capital; (c) limited public market for such securities; (d) the applicability of certain resale requirements under the Securities Act; and (e) applicable blue sky laws and the other factors discussed in this Risk Factors section.
- Share Price & Shareholder Rights - Risk 9Possible volatility of price of shares of our securities.
The market price for our securities may be volatile and is subject to significant fluctuations in response to a variety of factors, including the liquidity of the market for our securities, variations in our quarterly operating results, regulatory or other changes in the cannabis industry generally, announcements of business developments by us or our competitors, litigation, changes in operating costs and variations in general market conditions. Because we have a limited operating history in the cannabis industry, the market price for our securities may be more volatile than that of a seasoned issuer. Changes in the market price of our securities may have no connection with our operating results. No predictions or projections can be made as to what the prevailing market price for our securities will be at any time.
- Share Price & Shareholder Rights - Risk 10We are a holding company and all of our assets are held and operations are conducted through subsidiaries.
As a result of the Merger, currently a holding company and we conduct substantially all of our business through its subsidiaries, which generate substantially all of our revenues. Consequently, our cash flows are dependent on the earnings of its subsidiaries and the distribution of those earnings to the Company. The ability of these entities to pay dividends and other distributions will depend on their operating results and will be subject to applicable laws and regulations which require that solvency and capital standards be maintained by such companies and contractual restrictions contained in the instruments governing their debt or other contracts, in each case, which could limit the ability to pay such dividends or distributions, if at all. In the event of a bankruptcy, liquidation or reorganization of any of our subsidiaries, holders of indebtedness and trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to Grown Rogue.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
