{"url_path":"/sec/cxxif/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 ** **Quantitative and Qualitative Disclosures about Market Risk**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-06-12","source_url":"https://www.sec.gov/Archives/edgar/data/831609/0001062993-26-003168-index.html","accession_number":"0001062993-26-003168","cik":"0000831609","ticker":"CXXIF","issuer_name":"C21 Investments Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/831609/0001062993-26-003168-index.html","primary_entity_key":"0000831609","primary_entity_name":"C21 Investments Inc."},"word_count":625,"has_tables":true,"body_markdown":"**Item 11.** **Quantitative and Qualitative Disclosures about Market Risk**\n\nThe Company, through its financial assets and liabilities, is exposed to various risks. The Company has established policies and procedures to manage these risks, with the objective of minimizing any adverse effect that changes in these variables could have on these consolidated financial statements. The following analysis provides a measurement of risks as at the date of this Annual Report:\n\n***Credit Risk***\n\nCredit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company deposits the majority of its cash with high credit quality financial institutions in the United States. The Company is not exposed to any significant credit risk.\n\n***Liquidity Risk***\n\nLiquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investment and financing activities. Management and the Board are actively involved in the review, planning and approval of significant expenditures and commitments.\n\nThe Company's consolidated financial statements for year ended March 31, 2026, have been prepared on a going concern basis which assumes that the Company will be able to continue its operations and realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.\n\nThe Company takes a disciplined approach to financing and intends to protect shareholder value by raising capital strategically. The Company is assessing various opportunities for additional financing through either debt or equity to be used for corporate working capital and possible future acquisitions.\n\n68\n\nFurther, there remains uncertainty about the U.S. federal government's position on cannabis with respect to cannabis-legal states. A change in its enforcement policies could impact the ability of the Company to continue as a going concern and have a material adverse impact on the business.\n\n***Interest Rate Risk***\n\nInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.  The Company is not subject to any interest rate volatility as its long-term debt instruments and convertible notes are carried at a fixed interest rate throughout their term.\n\n***Foreign Currency Risk***\n\nThe Company is exposed to foreign currency risk from fluctuations in foreign exchange rates and the degree of volatility in these rates due to the timing of their accounts payable balances. The risk is mitigated by timely payment of creditors and monitoring of foreign exchange fluctuations by management. As at the date of this Annual Report, the Company did not use derivative instruments to hedge its exposure to foreign currency risk.\n\n***Commodity Price Risk***\n\nThe Company's operations do not involve the direct input or output of any commodities and therefore it is not subject to any significant commodity price risk. In addition, the Company does not have any equity investment in other listed public companies, and therefore it is not subject to any significant stock market price risk.\n\nThe Company is not a party to any foreign currency hedge contracts as at the date of this Annual Report.\n\n***Inflation Risk***\n\nInflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material effect on our financial position or results of operations to date, a continued high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross profit and selling, general and administrative expenses as a percentage of net sales if the selling prices of our services do not increase with these increased costs."}